DAVID ROYDEN - EMPLOYMENT SOLICITOR
UK EMPLOYMENT LAW

David Royden is a Partner with Laytons Solicitors and Head of Employment Law, Manchester, UK

Laytons Solicitors is a national law practice specialising in all aspects of Company and Commercial Law

Laytons Solicitors, 22 St John Street, Manchester M3 4EB.
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AGE DISCRIMINATION

The Age Discrimination Regulations are due to come into force on 1 October 2006. These new Regulations cover employment and vocational training and includes access to help and guidance, recruitment, promotion, development, termination, perks and pay. The regulations cover people of all ages, both old and young.

All employers, providers of vocational training, trade unions, professional associations, employer organisations and trustees, and managers of occupational pension schemes will have new obligations to consider under the Regulations. However, goods, facilities and services are not covered.

A key development is the removal of the upper age limits for unfair dismissal and redundancy claims. The Regulations will introduce a national default retirement age of 65 which will make compulsory retirement below age 65 unlawful (unless objectively justified). This is due to be reviewed in 2011. Under the Regulations all employees will have the ‘right to request’ to work beyond the default retirement age of 65 or any other retirement age set by the company and all employers will have a ‘duty to consider’ requests from employees to work beyond 65.

Occupational pensions are covered by the Regulations, as are employer contributions to personal pensions. However, the regulations generally allow pension schemes to work as they do now. The regulations do not affect state pensions.

Who does the law cover?

The Regulations will cover:

  • all workers including self employed, contract workers, office holders, the police and members of trade organisations
  • people who apply for work and, in some instances, people who have left work
  • people taking part in or applying for employment related vocational training including all courses at Further Education and Higher Education institutions.

The Regulations do not cover members of the regular armed forces, full-time and part-time reservists, or unpaid volunteers.

What does vocational training cover?

Vocational training covers all forms of training and retraining courses, practical work experience and guidance that contributes to employability, training provided by employers or private and voluntary sector providers, vocational training provided by further and higher education institutions and adult education programmes.

What do the regulations cover?

The Regulations cover direct and indirect discrimination, harassment and victimisation. Employers can (and no doubt extensively will) be held responsible for the actions of its employees in all cases. It is therefore imperative that appropriate training of key members of management is introduced as early as possible to ensure employers are not overtly exposed through the vicarious actions of its employees.

Are there any circumstances when treatment on grounds of age will be lawful?

As with Sex and Race Discrimination exemptions will be allowed on the basis of a Genuine Occupational Requirement (GOR) provided that there is an objective justification. However, both are likely to be difficult to prove. The 'test of objective justification', means employers will have to show with a sufficient degree of evidence that are pursuing a legitimate aim and that it is an appropriate and proportionately necessary means of achieving that aim.

However, the legislation will protect individuals or companies who are forced to discriminate on age grounds in order to comply with other superceding legislation, for example, bar staff serving alcohol must be at least 18.

My employees’ pay and benefits vary according to length of service. Will this become unlawful?

Benefits based on a length of service requirement of 5 years or less, the ‘5 year exemption’, will be exempted and will be able to continue. Thus any benefit which requires the successful completion of a probationary period, assuming that the probationary period is less than 5 years(!), will remain lawful. However after the 5-year exemption, the burden will be on employers to show that there will be an advantage from rewarding loyalty, encouraging the motivation or recognising the experience of workers by awarding benefits purely on the basis of length of service.

How does the legislation impact on the National Minimum Wage?

Employers will continue to be able to follow and rely on the age bands and minimum wage levels used in the national minimum wage legislation.

What should I know about the default retirement age?

The default retirement age will be set at 65 for men and women. This will mean that mandatory retirement before that age will be unlawful unless a lower age can be exceptionally and objectively justified. It does not mean that employers need to set a retirement age at 65 either. It is open to employers to operate with no retirement age at all, or set a retirement age of 65 or higher. However, given that the upper limit for Unfair Dismissal claims is to be removed it seems sensible that employers should determine the appropriate retirement age and formally clarify it in the contract of employment.

However, this value of this exercise is subject to the rule that all employees will have the 'right to request' to work beyond any retirement age. Furthermore, employers will have new time-bound responsibilities to inform employees of their 'right to request' and they will have a 'duty to consider' all such applications. It is assumed that this will operate on a similar basis to the relevantly recent right to request Flexible Working. However, where an extension of work is agreed, the 'right to request' and 'duty to consider' will remain in place when retirement is next considered.

What will the new regulations say about occupational pension schemes?

It is difficulty to say. What is clear is that the provisions of Occupational pension schemes are covered by the Regulations (although the draft legislation allows occupational pension schemes in general to work as they do at present).

However, personal pensions not provided by the employer (except the employer’s own contribution) are not covered by the draft regulations.

It does appear that employers will be able to provide different pension schemes to employees of different ages or with different lengths of service and employers will be entitled to use minimum and maximum ages for admission to pension schemes and for the payment of pensions.

What should I do now?

It is essential that employers familiarise themselves and their staff, especially management and those involved in the recruitment process, with the terms and provisions of the new Regulations. It is also essential that employers review their employment policies and procedures.


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