The Employment Equality (Age) Regulations 2006, which came into force on 1 October 2006, aim to achieve equal treatment in employment and vocational training to eradicate discrimination on the grounds of age.
Under the Regulations it is unlawful to make employment decisions based on a person’s age. Retirement ages below 65 are unlawful unless they can be objectively justified. The legislation also removes the upper age limits for unfair dismissal rights and statutory redundancy payments.
Here is a check list to help you ensure your business complies with the law.
Retirement Age
The legislation allows employers to have in place a compulsory retirement age of 65 or older but, if you do, the new statutory procedures must be followed. These include giving employees at least six months’ notice of their intended date of retirement and notifying them that they have the right to request to continue working beyond either the default retirement age or the normal retirement age set by the employer. Employers have a duty to consider such a request. If the employee’s request is granted the employer must remember to put the revised contract terms in writing. It is therefore important to be aware of forthcoming retirements and to have the necessary systems in place for notifying employees and dealing with requests to continue working. You may decide not to have a set retirement age and to offer flexible working arrangements.
We recommend that you keep an age profile of your staff so that you can plan for retirements. This can also be used to inform your recruitment policy, rectifying any obvious age imbalance in the workforce, and to ensure that equal access is given to training and other opportunities.
Heyday, an organisation for people in or nearing retirement, has challenged the Government over the inclusion in the Employment Equality (Age) Regulations 2006 of a mandatory retirement age, on the grounds that this means that the Regulations do not fully implement the EC Equal Treatment Framework Directive 2000/78. Heyday wants the legislation amended to give workers over 65 the same protection from discrimination as younger workers. In order to settle the issue, the matter was referred for judgment to the European Court of Justice (ECJ). In a recent case referred by the Spanish Courts (Palacios de la Villa v Cortefiel Servicios SA) the ECJ ruled that a compulsory retirement age set by national law, although discriminatory, was not incompatible with the requirements of the Directive. In the light of this judgment, it seems likely that the UK Government will be able to defeat Heyday’s challenge by justifying the need for a default retirement age as part of its legitimate employment policy. However, the ruling is not expected until at least 2009.
Recruitment
When advertising for new staff, take care to avoid requirements which disadvantage a particular age group. Avoid insisting on a certain number of years’ experience where this cannot be justified, as this could discriminate against a young person, and do not use language that is age-related, such as the words ‘young’ or ‘mature’. Specifying knowledge and skills which are not a genuine requirement of the job could also constitute unlawful discrimination on the grounds of age. Target your advertising so that it reaches a variety of age groups.
Whilst it is not unlawful to request a person’s date of birth on a job application form, this should only be used for monitoring/statistical purposes and to inform your equal opportunities policy. It should not be a consideration during the selection process.
Training
All employees must be given the same opportunities to develop their skills and maximise their employment potential. Employers and other training providers cannot legally set age limits for access to training unless they can show that there is a real need to apply such limits. Be careful not to assume that older members of the workforce are not interested in advancing their careers.
Performance Targets and Appraisals
Targets and performance standards for the same job should be the same, irrespective of the age of the employee. Appraisals must be handled with care. Reports should avoid ageist language such as ‘shows maturity for their age’.
Redundancy
The lower and upper age limit for statutory redundancy rights is removed. Once an employee has completed the employer’s minimum qualifying period, a worker under 18 or over 65 has the same rights to redundancy payments as other employees. If an employer’s redundancy benefits scheme is significantly different from the statutory scheme, it may be challenged so it is important to amend it unless the differences can be objectively justified. In a redundancy situation, selection for redundancy should not be based on age.
Pay and Benefits
A thorough review of promotion procedures and all employee benefits should be carried out to identify practices and policies where age is a factor and changes made where necessary.
As regards length of service-based pay increases, any benefit based on five years’ service or less is exempt. However, if for example a worker who has six years’ service claims that they are being discriminated against because they are being paid less than someone with more service, the employer must show that the difference in pay fulfils a genuine business need. If an employee considers that their employer’s benefits structure discriminates on grounds of age, he or she can make a complaint to an employment tribunal.
Pensions
The parts of the Employment Equality (Age) Regulations 2006 that apply to pension schemes came into force on 1 December 2006.
Protection from discrimination on age grounds now applies with regard to pension benefits accrued or payable after 1 December 2006. The Regulations also empower the trustees and managers of occupational pension schemes to alter the scheme rules to ensure compliance with the Regulations.
There are exemptions to the rules which affect a variety of areas. For example:
• minimum pay levels for entry to occupational schemes are permitted;
• a reduced spouse’s pension is allowable on the grounds of discrepancy in age;
• maximum levels of pensionable service can be set for the purposes of calculating the pension paid;
• age and service related benefits are allowed if the aim is to maintain the value of pension benefits for older scheme members;
• age related contributions to money purchase and defined benefit schemes are permitted if the aim is to provide more equal pensions and to pay for member benefits respectively; and
• salary related pension rates and contributions are permitted.
There are special rules for dealing with pension increases for pensioners over 55 years of age and for ‘bridging pensions’ for men aged between 60 and 65 years of age.
The Regulations also apply to employer contributions to personal pension schemes, with exemptions similar to the above.
Failure to comply with the Regulations as regards pensions creates the risk that scheme benefits will be ‘levelled up’ as appropriate from 1 December 2006, which could prove to be very costly indeed for the scheme and ultimately for the employer.
Workplace Policies and Culture
Make sure your equality, bullying and harassment policies clearly state that discrimination on grounds of age will not be tolerated. Make sure all staff are aware of the policies and provide any training necessary for their implementation. In addition, your IT policy should make it clear that email communications should not contain anything discriminatory. Incidents involving discrimination, harassment or victimisation on age grounds must be dealt with promptly and any complaints dealt with appropriately. Failure to do so could result in you being held responsible. The penalties for age discrimination can be severe, with no upper limit to the compensation that an employment tribunal can award.
We will be pleased to advise you on any aspect of the legislation, how it affects your business and how to ensure that your employment practices, policies and procedures are fully compliant, so that all employees have equal access to help, guidance, development opportunities, promotion, remuneration and benefits, irrespective of their age.
Useful Guidance
ACAS guidance: ‘Age and the Workplace’ .
Under the Regulations it is unlawful to make employment decisions based on a person’s age. Retirement ages below 65 are unlawful unless they can be objectively justified. The legislation also removes the upper age limits for unfair dismissal rights and statutory redundancy payments.
Here is a check list to help you ensure your business complies with the law.
Retirement Age
The legislation allows employers to have in place a compulsory retirement age of 65 or older but, if you do, the new statutory procedures must be followed. These include giving employees at least six months’ notice of their intended date of retirement and notifying them that they have the right to request to continue working beyond either the default retirement age or the normal retirement age set by the employer. Employers have a duty to consider such a request. If the employee’s request is granted the employer must remember to put the revised contract terms in writing. It is therefore important to be aware of forthcoming retirements and to have the necessary systems in place for notifying employees and dealing with requests to continue working. You may decide not to have a set retirement age and to offer flexible working arrangements.
We recommend that you keep an age profile of your staff so that you can plan for retirements. This can also be used to inform your recruitment policy, rectifying any obvious age imbalance in the workforce, and to ensure that equal access is given to training and other opportunities.
Heyday, an organisation for people in or nearing retirement, has challenged the Government over the inclusion in the Employment Equality (Age) Regulations 2006 of a mandatory retirement age, on the grounds that this means that the Regulations do not fully implement the EC Equal Treatment Framework Directive 2000/78. Heyday wants the legislation amended to give workers over 65 the same protection from discrimination as younger workers. In order to settle the issue, the matter was referred for judgment to the European Court of Justice (ECJ). In a recent case referred by the Spanish Courts (Palacios de la Villa v Cortefiel Servicios SA) the ECJ ruled that a compulsory retirement age set by national law, although discriminatory, was not incompatible with the requirements of the Directive. In the light of this judgment, it seems likely that the UK Government will be able to defeat Heyday’s challenge by justifying the need for a default retirement age as part of its legitimate employment policy. However, the ruling is not expected until at least 2009.
Recruitment
When advertising for new staff, take care to avoid requirements which disadvantage a particular age group. Avoid insisting on a certain number of years’ experience where this cannot be justified, as this could discriminate against a young person, and do not use language that is age-related, such as the words ‘young’ or ‘mature’. Specifying knowledge and skills which are not a genuine requirement of the job could also constitute unlawful discrimination on the grounds of age. Target your advertising so that it reaches a variety of age groups.
Whilst it is not unlawful to request a person’s date of birth on a job application form, this should only be used for monitoring/statistical purposes and to inform your equal opportunities policy. It should not be a consideration during the selection process.
Training
All employees must be given the same opportunities to develop their skills and maximise their employment potential. Employers and other training providers cannot legally set age limits for access to training unless they can show that there is a real need to apply such limits. Be careful not to assume that older members of the workforce are not interested in advancing their careers.
Performance Targets and Appraisals
Targets and performance standards for the same job should be the same, irrespective of the age of the employee. Appraisals must be handled with care. Reports should avoid ageist language such as ‘shows maturity for their age’.
Redundancy
The lower and upper age limit for statutory redundancy rights is removed. Once an employee has completed the employer’s minimum qualifying period, a worker under 18 or over 65 has the same rights to redundancy payments as other employees. If an employer’s redundancy benefits scheme is significantly different from the statutory scheme, it may be challenged so it is important to amend it unless the differences can be objectively justified. In a redundancy situation, selection for redundancy should not be based on age.
Pay and Benefits
A thorough review of promotion procedures and all employee benefits should be carried out to identify practices and policies where age is a factor and changes made where necessary.
As regards length of service-based pay increases, any benefit based on five years’ service or less is exempt. However, if for example a worker who has six years’ service claims that they are being discriminated against because they are being paid less than someone with more service, the employer must show that the difference in pay fulfils a genuine business need. If an employee considers that their employer’s benefits structure discriminates on grounds of age, he or she can make a complaint to an employment tribunal.
Pensions
The parts of the Employment Equality (Age) Regulations 2006 that apply to pension schemes came into force on 1 December 2006.
Protection from discrimination on age grounds now applies with regard to pension benefits accrued or payable after 1 December 2006. The Regulations also empower the trustees and managers of occupational pension schemes to alter the scheme rules to ensure compliance with the Regulations.
There are exemptions to the rules which affect a variety of areas. For example:
• minimum pay levels for entry to occupational schemes are permitted;
• a reduced spouse’s pension is allowable on the grounds of discrepancy in age;
• maximum levels of pensionable service can be set for the purposes of calculating the pension paid;
• age and service related benefits are allowed if the aim is to maintain the value of pension benefits for older scheme members;
• age related contributions to money purchase and defined benefit schemes are permitted if the aim is to provide more equal pensions and to pay for member benefits respectively; and
• salary related pension rates and contributions are permitted.
There are special rules for dealing with pension increases for pensioners over 55 years of age and for ‘bridging pensions’ for men aged between 60 and 65 years of age.
The Regulations also apply to employer contributions to personal pension schemes, with exemptions similar to the above.
Failure to comply with the Regulations as regards pensions creates the risk that scheme benefits will be ‘levelled up’ as appropriate from 1 December 2006, which could prove to be very costly indeed for the scheme and ultimately for the employer.
Workplace Policies and Culture
Make sure your equality, bullying and harassment policies clearly state that discrimination on grounds of age will not be tolerated. Make sure all staff are aware of the policies and provide any training necessary for their implementation. In addition, your IT policy should make it clear that email communications should not contain anything discriminatory. Incidents involving discrimination, harassment or victimisation on age grounds must be dealt with promptly and any complaints dealt with appropriately. Failure to do so could result in you being held responsible. The penalties for age discrimination can be severe, with no upper limit to the compensation that an employment tribunal can award.
We will be pleased to advise you on any aspect of the legislation, how it affects your business and how to ensure that your employment practices, policies and procedures are fully compliant, so that all employees have equal access to help, guidance, development opportunities, promotion, remuneration and benefits, irrespective of their age.
Useful Guidance
ACAS guidance: ‘Age and the Workplace’ .
The Department for Business, Enterprise and Regulatory Reform’s age discrimination web pages, including guidance entitled ‘The impact of Age Regulations on pension schemes’ .
