Jan 2006

Debut of Anti-Age Discrimination legislation in sight
by Robert Campbell

Age discrimination in employment will become unlawful on the 1st October 2006. This summer the Government finally goes public with it’s proposals. Age laws will mean a major shake up in retirement practices, statutory redundancy and unfair dismissal laws. They will also impact on service related benefits, occupational pensions and of course recruitment, training and promotion policies.

The age laws have now been issued in draft form and are complex. The main provisions include measures that:

• Prohibit unjustified age discrimination in employment and vocational training.

• Require employers who set their retirement age below the default age of 65 to justify or change it.

• Introduce a new duty on employers to consider an employee’s request to continue working beyond retirement.

• Require employees in writing, and at least 6 months in advance, of their intended retirement date. This will allow people to plan for their retirement.

• Remove the upper age limit for unfair dismissal and redundancy rights, giving older workers the same rights to claim unfair dismissal or receive a redundancy payment as younger workers, unless there is a genuine retirement.

• Include provisions relating to service related benefits and occupational pensions.

• Remove the age limits for Statutory Sick Pay, Statutory Maternity Pay, statutory Adoption Pay and Statutory Paternity Pay.

Who does the law cover?

• All workers including self-employed, contract workers, office holders, the police and members of trade organisations.
• People who apply for work and, in some instances, people who have left work.
• People taking part in or applying for employment related vocational training including all courses at Further Education and Higher Education institutions.

Who isn’t covered?

• Members of the regular armed forces, full-time and part-time reservists.
• Unpaid Volunteers.

What "vocational training" covers

All forms of training and retraining courses, practical work experience and guidance that contributes to employability, training provided by employers or private and voluntary sector providers, vocational training provided by further and higher education institutions and adult education programmes.

What the regulations cover

• Direct and indirect discrimination, harassment and victimisation.
• Employers can be held responsible for the actions of employees in all four cases.

Circumstances when treatment on grounds of age will be lawful

Exemptions will be allowed on Genuine Occupational Requirement (GOR) and if there is an objective justification’.

This means employers will have to show with evidence that they are pursuing a legitimate aim and that it is an appropriate and necessary (proportionate) means of achieving that aim.

The legislation will protect individuals or companies who are forced to discriminate on age grounds in order to comply with other legislation e.g. bar staff serving alcohol must be at least 18.

Where employees’ pay and benefits vary according to length of service, can this continue?

Benefits based on a length of service requirement of 5 years or less, the ‘5 year exemption’, will be exempted and will be able to continue.

After the 5-year exemption, employers must show that there will be an advantage from rewarding loyalty, encouraging, motivating or recognising the experience of workers by awarding benefits on the basis of length of service.

Impact on the National Minimum Wage

Employers will be able to follow the age bands and minimum wage levels used in the national minimum wage legislation.

The default retirement age

The default retirement age will be set at 65 for men and women. It means mandatory retirement before that age will be unlawful unless a lower age can be exceptionally objectively justified. It does not mean you need to set a retirement age at 65 either – you can operate with no retirement age, or set a retirement age of 65 or higher. All employees will have the ‘right to request’ to work beyond any retirement age.

Employers will have new time-bound responsibilities to inform employees of their ‘right to request’ and they will have a ‘duty to consider’ all applications.

Where an extension of work is agreed, the ‘right to request’ and ‘duty to consider’ will remain in place when retirement is next considered.

Occupational pension schemes

Occupational pension schemes are included (although the draft legislation allows occupational pension schemes in general to work as they do at present).

Personal pensions not provided by the employer (except the employer’s own contribution) are not covered by the draft regulations.

Employers will be able to provide different pension schemes to employees of different ages or with different lengths of service and use minimum and maximum ages for admission to pension schemes and for the payment of pensions.

Conclusion

As with all new legislation the way in which it is interpreted by courts and tribunals will not be certain until some years have passed and cases have been determined. As always, the golden rule is try to ensure you avoid arbitrary decisions based upon stereotypes, and always keep records of your reasons when taking decisions.

Notes for editors

2. For immediate release.

ENDS