Employment Alert 123: Age Discrimination - The New Regulations
September 28, 2006
| What is it? |
As you will no doubt be aware, the new age discrimination Regulations will come into force on 1 October 2006 (this Sunday).
The Regulations prohibit age discrimination and will affect many areas of the employment relationship including recruitment, promotion, benefits and retirement (see Employment Alert no. 116). The age Regulations will also affect pensions, but the implementation of this part of the Regulations has been delayed until 1 December 2006 (see the Employment and Pensions Alert of 8 September 2006).
It is anticipated that age discrimination will be a major area of employment litigation in the next few years.
| What does this mean for employers? |
By now, all employers should have analysed the impact that the Regulations will have on their businesses and amended their practices and procedures accordingly. If you have not yet taken steps to comply with the Regulations you should consider taking the following steps:
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Recruitment processes. Check recruitment advertising for references which could infer that you are looking for candidates of a particular age (e.g. “young and dynamic”, or “mature candidate”). Birth date information should also be removed from application forms.
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Equal opportunities, diversity and harassment policies. These should be updated to refer to age discrimination, victimisation and harassment.
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Management training. Line managers should be aware of and able to comply with the new Regulations when managing, recruiting, retiring, disciplining and dismissing employees. Managers should also be equipped to deal with any age related grievances.
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Terms and conditions of employment. These should be updated to ensure that the normal retirement age is 65 or greater and that contractual benefits (e.g. private medical insurance) are not provided in a manner which discriminates on the grounds of age. Consider whether benefits and the way they are provided, fall within the Regulations. Service-related benefits, eg annual leave or sick leave may potentially be discriminatory. However, there are a number of exceptions that may apply to service related benefits, e.g. if the qualifying period of service is 5 years or less, the benefit will be lawful.
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Promotion policies. Promotion should not be dependent on having reached a certain age or even having a particular length of service (unless this is justifiable).
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Non-contractual benefits. Other benefits, such as enhanced redundancy compensation or non-contractual bonuses will need to be checked to ensure that they are provided in a non-discriminatory way. The calculation of enhanced redundancy payments should mirror the statutory scheme unless a different formula can be objectively justified.
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Retirement policies and procedures. Processes should be in place to ensure that adequate notice of retirement and information about the right to request a continuation of employment is given to retiring employees. This will be key. Employers should also have procedures in place to consider any request for continued employment and to offer an appeal against any decision not to grant it.
| What are the transitional positions? |
If you intend to retire employees between 1 October 2006 and 31 March 2007, then complex transitional procedures apply. It is important that these transitional procedures are followed in any retirement situation. The extent to which they are followed will determine whether the employer can use “retirement” as the potentially fair reason for dismissal. If the procedures are not followed, any retirement dismissal is likely to be unfair, and potentially discriminatory.
The transitional procedures provide that:
Notification before 1 October 2006
If the employer:
- gives at least 4 weeks’ notice of termination of employment due to retirement prior to 1 October 2006; and
- on or as soon as practicable after 1 October 2006 (i.e. on Sunday for employers who operate fully on a Sunday or on Monday for other employers), notifies the employee of the right to make a request to continue working; then
at least 4 weeks prior to the intended termination date (or if this is not practicable, as soon as reasonably practicable and, in any event, no later than 4 weeks after the intended termination date) the employee can make a request to work beyond retirement. The employer should then follow the normal procedure for considering a request.
NB: While giving only 4 weeks’ notice will suffice for these purposes, giving less than contractual notice could still result in a breach of contract claim.
Notification on or after 1 October 2006
If the employer:
- gives contractual (or, if longer, statutory) notice of termination of employment due to retirement on or after 1 October 2006, and that notice will expire before 1 April 2007; and
- notifies the employee of the right to make a request to continue working either at the same time as notice was given, or before notice was given; then
at least 4 weeks prior to the intended termination date (or if this is not practicable, as soon as reasonably practicable and, in any event, no later than 4 weeks after the intended termination date) the employee can make a request to consider working beyond retirement. The employer should then follow the normal procedures for considering a request.
Short notice
If the employer gives notice of termination of employment due to retirement (whether before on or after 1 October 2006) which is due to expire prior to 1 April 2007, but the notice does not satisfy the minimum notice periods above, then from 1 October 2006 until the termination date, the employer is under a continuing duty to notify the employee of the right to make a request to continue working.
The employee may make such a request up to 4 weeks before the intended termination date (or if this is not practicable, as soon as reasonably practicable and, in any event, no later than 4 weeks after the intended termination date).
The employer should then follow the normal duty to consider process.
