With new legislation imminent to deal with issues of age discrimination, Amal Adlane examines the legal position of employing people of all ages.
Until now, there has been no legislation dealing with age discrimination in the UK. However, this is set to change in October when the Government will introduce legislation to combat ageism. The Employment Equality (Age) Regulations 2006 will outlaw age discrimination in the field of employment. The Regulations will affect all areas of the employment cycle from recruitment to retirement and employers are advised to start assessing the impact that these Regulations will inevitably have on their current employment practices, policies and procedures.
Ageist treatment in the workplace may often occur unintentionally or unconsciously. This, however, will not amount to a justifiable defence under the Regulations and, in order to avoid discrimination, employers must make major changes in mindset, and review all their practices and policies. The risks of falling foul of the new laws are likely to be significant, not least because levels of compensation that may be awarded by an employment tribunal are uncapped.
The new legislation introduces a number of important changes, including:
" The introduction of a new national default retirement age of 65
" The introduction of a duty to consider procedure, which must be followed by employers who intend to retire an employee
" Removal of the age restriction on bringing unfair dismissal and redundancy pay claims
" The general prohibition of offering staff benefits contingent upon length of service (other than in limited circumstances).
Retirement
The Regulations will introduce a national default retirement age of 65. This does not restrict employers establishing a lower retirement age, providing that lower age can be objectively justified, nor does it restrict employers from not applying a retirement age at all. However, an employer, whose current compulsory retirement age is lower than 65, should re-evaluate and increase that age to 65 unless there is an objective reason that justifies that lower age. The Regulations also introduce a duty to consider procedure when dismissing an employee on retirement grounds.
To avoid falling foul of the Regulations, when dealing with a planned retirement an employer must, within specified timescales, notify the employee of their right to request to work beyond retirement and the employer has a duty to consider that request. Notification in the contract of employment or in a policy given to the employee will not suffice it must be sent in accordance with the Regulations.
A failure to comply with the retirement procedures set out in the Regulations will be unlawful and may result in an automatic unfair dismissal. Remember, any change to the retirement age will amount to a change of an employees terms of employment and will therefore require the consent of the employee(s) in question.
Many employers provide benefits linked to length of service for example, a loyalty bonus that may be payable upon reaching ten years service. Policies like this, based on length of service (which may therefore disadvantage younger workers), will not be caught by the new laws unless the disadvantaged person has more than five years service in which case the employer has to show that it reasonably appears that the criterion of length of service fulfils a business need such as encouraging loyalty, motivation or rewarding experience. Whilst at first sight this appears to be a wide exception, the scope of this will only be properly understood once the employment tribunals have considered, and provided guidance, on this aspect of the Regulations.
Redundancy
The age limits for bringing claims for unfair dismissal and redundancy will be removed. In relation to statutory redundancy, the Government has decided to retain the current formula (based on three age-based multipliers) for calculating statutory redundancy payments. However, enhanced redundancy payments will be unlawful unless based on the same multipliers used for calculating statutory redundancy payments.
Further, employers should also be vigilant when formulating and using redundancy selection criteria to ensure that the criteria used are not discriminatory (whether intentionally or otherwise). For example, qualifications or experience criteria may amount to indirect discrimination that may or may not be justifiable, and employing a last-in, first-out selection policy may also be unlawful on the basis that this may put younger workers at a disadvantage.
In order to determine whether any of their current recruitment criteria fall foul of the impending legislation, employers should carefully review these. An employer is permitted to discriminate on the grounds of age if they can establish a genuine occupational requirement that is proportionate. For example, acting jobs may fall into this defence. In practice, this exemption is likely to apply in very limited circumstances.
The conduct of employers before the new laws come into force in October will be relevant as evidence in claims under the new law. It is, therefore, important that employers review and revise employment contracts and other employment-related policies, such as the Equal Opportunities Policy, to include age.
Employers should also review the wording used in job advertisements, job specifications and application packs: asking for a date of birth will not in itself be discriminatory, but care should be taken of any wording or imagery that may suggest differences of treatment based on age. At the same time, recruitment, selection and interview processes must be reviewed to assess whether any age requirements, qualifications or experience criteria are necessary and justified.
If pay and benefit regimes of employers discriminate on the grounds of age (i.e. length of service), employers should ensure that either the five-year exception applies or that it can be justified. Similarly, training and promotional opportunities are accessible to all staff, regardless of age unless objective justification can be established.
All ages
Whilst the new Regulations represent the first legislative step to meeting the demands of an ageing society, it is vital for employers to remember that the Regulations do not only apply to older workers but also younger workers and those in between. During the next six months there will be a great emphasis on employers to evaluate the extent to which age may be a factor in their current employment practices and to adopt an appropriate strategy to bring those practices in line with the new law.
Amal Adlane is a Solicitor at Harbottle & Lewis LLP.
t: 020 7667 5151; e: amal.adlane@harbottle.com
Note: This Article contains general information based on English law and, although we endeavour to ensure that the content is accurate and up to date, users should seek appropriate legal advice before taking or refraining from taking any action. The contents of this article should not be construed as legal advice and Harbottle & Lewis LLP disclaim any liability in relation to its use.