PUBLICATION: Accountancy

Age Discrimination

Feature on age discrimination. As of October 2006 it will be illegal to discriminate on the basis of age, just as it already is on gender, race, and sexuality. This is the biggest change in employment law for nearly 30 years, and businesses have just one year to prepare for it.

1. What are they doing?
2. What should they be doing?
3. What are the implications of inaction?
4. Where can they get help?

GREY PRIDE:
It’s no surprise, given the looming pensions crisis and reports that many of us will all have to work into our dotage, that the government is finally getting around to outlawing age discrimination. But will the new regulations transform us into a nation proud to be grey?

Unsurprisingly age related harassment will be outlawed where someone’s dignity has been violated, or they’re subjected to intimidating, hostile or degrading treatment. We live in a politically correct world. Will this cover jokey birthday cards? Quite possibly.

As you might imagine, ageist discrimination in general will also be covered, unless there is an ‘objective justification’ for treating an employee or job applicant less favourably on the grounds of age. Remember, this applies to the young as well as to the old.

For example health or fitness tests in the recruitment process may well constitute indirect age discrimination, as they would adversely exclude a larger number of older applicants than younger. Such testing would have to be justified in terms of that particular job, which could be tricky if all the person is employed to do is sit at a desk and tap away on a computer all day.

Employment related insurance is likely to be covered. Therefore if you only offer death in service benefits to employees subject to passing a health test or on the basis of age, this may well be discriminatory unless objectively justified.

Selection for redundancy on the grounds of proximity to retirement age is also likely to be discriminatory.

Employers can justify age discrimination if it is a proportionate means of achieving a legitimate aim. This seems likely to include for example service related benefits, such as additional holiday for long serving members of staff.

In any case, length-of-service requirements of five years or less will be exempted and any length-of-service requirement mirroring a similar statutory benefit will be permitted. (for example enhanced redundancy payments).

Some employers may question the point of recruiting a 63 year old if s/he’ll be retiring two years later. It seems likely that fixing a maximum age for recruitment may be objectively justifiable if the applicant needs to be trained up for the job and a ‘reasonable period’ of employment is needed before retirement. Quite what a reasonable period of employment will be remains to be seen and no doubt many employers will prudently rely on some other (spurious) reason for not appointing.

There will also be an exception for ‘Genuine Occupational Requirements’, for example a 60 year old ‘youth worker’ may not be able to relate so well to a spotty 13 year old although again this exception may prove hard to justify.

Occupational pension schemes will continue on the whole as is presently the case and a schedule to the regulations contains a full list of age-related rules or practices in occupational pension schemes that are effectively exempted.

The default (but not compulsory) retirement age will be set at the age of 65. Compulsory retirement at a lower age will still be possible but only if objectively justifiable, and which seems unlikely for the vast majority of occupations.

Employees will be able to ask to work beyond the compulsory retirement age, and the employer will have to reasonably consider such requests in a similar way to the existing Flexible Working Regulations. The employer will have to write to the employee about retirement no more than 12 months and no less than six months before retirement is due, pointing out the employee's right to make a request to continue working longer. Failure to do so can result in an award of up to eight weeks' pay and if the employer fails to notify, the ‘retirement’ dismissal will be automatically unfair.

The employee's request to stay on has to be made between 12 to 6 months before the retirement date. If the employer fails to follow the prescribed procedure or fails to properly consider the request, the dismissal will again be unfair. This is likely to prove quite tricky for many employers to manage and there’s a potential clash if the employer doesn’t want to keep the person on because they’re not up to the job. A separate capability procedure should be adopted to address that particular knotty problem.

The up-shot of the employee’s request could be a new later retirement date. The whole process has to be gone through again when the new retirement date approaches. For each retirement date, the employee may make one formal request.

What to do now:
As grey-haired Corporal Jones of Dads Army may have urged us, ‘Don’t Panic’. Here’s what to do:

• Update your equal opportunities policy
• Check and update your other policies with care to ensure that they are not indirectly discriminatory.
• Check the requirements of any benefits you offer.
• If your standard retirement age is not already sixty five, either change it or consider very carefully why a lower retirement age is justifiable.
• Get your occupational pension administrators to review your scheme in the light of the new regs.
• Start training your staff, especially in HR, senior managers and recruiters now. For many, the new regulations will require a complete change of the working culture.
• Subscribe to ‘The Oldie’ (optional).

The DTI will be publishing guidance in due course and your employment lawyer will be able to help you prepare.

Don’t be one of the many employers who will find themselves at the wrong end of a Tribunal claim. Start preparing now. Remember; it’s ok to be grey.

This information was written by Caroline Walker, head of the Employment Law Department at Sprecher Grier Halberstam LLP, Solicitors.

Caroline Walker Partner / Head of Employment Law 020 7544 5625 carolinew@sghlaw.com