The Regulations, which implement the part of the Equal Treatment Directive regarding age, will come in to force in October 2006. They are designed to outlaw age discrimination in employment and vocational training and will impact on employment practices and procedures from the recruitment stage through to retirement.

MAIN PROVISIONS AT A GLANCE

1. Age Discrimination – is prohibited, subject to there being an objective justification. Harassment and victimisation are also unlawful. This covers all aspects of the employment relationship; including advertising job vacancies, recruitment, selection, promotion, training, benefits and retirement.

2. Retirement Age – if an employer’s stipulated retirement age is under 65 (the government’s statutory default retirement age) then it will need to be objectively justified to be lawful;

3. Retirement Procedure – retirement at or above 65 may be a fair reason for dismissal so long as the retirement is “planned” and the employer follows a “duty to consider” procedure, which may involve the employee requesting to work beyond retirement;

4. Service Related Pay and Benefits – benefits such as incremental pay schemes and increasing holiday entitlement which are based on length of service will be lawful only during the first five year’s of employment or reflect statutory benefits. Otherwise they will need to be objectively justified.

5. Unfair Dismissal – the upper age limit has been removed.

6. Redundancy Payment – individuals over 65 will be able to claim a redundancy payment and the age-based provisions for calculating the payment will be changed.

7. Occupational Pension Schemes – will be mostly unaffected by the legislation.

DISCRIMINATION (DIRECT AND INDIRECT)

The legislation will prohibit both direct and indirect age discrimination, unless such treatment can be objectively justified. Direct discrimination may be, for example, asking a 50 year old job applicant to undergo a medical examination and not asking a younger applicant to do the same. Indirect discrimination is the application of a provision, criteria or practice which results in less favourable treatment of a category of workers, on the grounds of their age. This might include, for example, advertising a job for a “newly qualified” candidate, which may discriminate against older candidates.

The “objective justification” defence involves an employer demonstrating that it has a legitimate business aim and that the method adopted is a proportionate means of achieving that aim. This will not be an easy test to satisfy and will require good evidence to show why the employer acted or failed to act as they did. There are also two very limited special justification provisions: firstly, where there is a genuine occupational requirement and secondly where it is positive action in respect of vocational training with the aim of encouraging people to take advantage of employment opportunities.

COMPULSORY RETIREMENT

The government has devised a statutory default retirement age of 65, which will be reviewed in 2011. If an employer has a compulsory retirement age below this it will generally be unlawful unless it can be objectively justified.

UNFAIR DISMISSAL

The current age limit of 65 for bringing an unfair dismissal claim will be removed. To defend an unfair dismissal claim an employer has to be able to show that the reason and manner of dismissal were fair.

A retirement will be a fair dismissal so long as it is a “planned” retirement and the employer has followed the “duty to consider” procedure.

A planned retirement involves the employer notifying the employee in writing at least 6 months in advance of the retirement date.

If the employee’s retirement is not “planned” and the employee brings an unfair dismissal claim, then the burden of proof is on the employer to show that retirement was the genuine reason for the dismissal and that the “duty to consider” was complied with.

The duty to consider procedure involves 6 steps:

i. Notify the employee in writing not more than 12 months and no less than 6 months beforehand of (a) the intended date of retirement and

ii. (b) of their right to request working beyond the date of retirement. Failure to do this entitles an employee to bring a claim for up to 8 weeks’ pay. The duty to do this continues up to 2 weeks prior to the dismissal. If the employer fails to do this it will render the dismissal will be automatically unfair

iii. If the employee wishes to work beyond the retirement date they must submit a request between 12 months and 6 weeks prior to the retirement date;

iv. The employer must either agree to the request or hold a meeting to discuss it

v. The employer must notify the employee of the decision within 2 weeks of the meeting. If this is not done the employment relationship will continue even beyond the proposed retirement date;

vi. The employee will have 2 weeks in which to appeal the decision. If they appeal then a meeting should be arranged, even if retirement has taken effect. If the “duty to consider” is not complied with in full by the employer then the employee may be able to bring a claim for automatic unfair dismissal.

REDUNDANCY

The formula for calculating redundancy payments will be changed, so that it is no longer based on age. Also the upper and lower age limits will be removed. However, the two year qualifying period before an employee is entitled to a redundancy payment will remain.

SERVICE RELATED PAY AND BENEFITS

The general position is that a service-related requirement is unlawful age discrimination. However a specific exemption in the regulations allow a length of service requirement to be applied, for example, to pay and benefits during the first five years of employment or at any time where the service requirement mirrors a similar requirement in a statutory benefit (eg the two year service requirement to qualify for a redundancy payment). Service related benefits may also be lawful if they reward loyalty, encourage motivation or recognise experience and there is a real business benefit to be achieved. Any service related benefit falling outside of these criteria needs to be objectively justified.

OCCUPATIONAL PENSIONS

The Government has confirmed its intention to take advantage of the permitted exemption for pensions from the age discrimination legislation. This means that most of the age-related rules within occupational pension schemes will be lawful. However, where an exemption is not applicable trustees and managers may be required to objectively justify the relevant provision.

COMPENSATION FOR AGE DISCRIMINATION

An employee may bring a claim in the employment tribunal within three months of the alleged discriminatory act. As with other discrimination legislation, the compensation for age discrimination will be unlimited and can include an award for injury to feelings.

HOW WE CAN HELP YOUR BUSINESS

We hope that you find this article informative. The new legislation will certainly keep HR departments busy over the next year in the run up to the implementation date. We would be happy to assist you in ensuring that your workplace is compliant with the new age discrimination legislation. We can:

 Help you formulate an age discrimination policy tailored to your organisation.

 Assist in auditing your existing policies and procedures and recommend and/or draft changes to these where necessary.

 Provide training for managers and staff on the new age discrimination measures.

 Provide specific advice regarding any areas of concern.

This article is not a comprehensive guide to the law and advice should be sought on individual situations. To view the consultation paper visit [[http:www.dti.gov.uk/er]]