The clock is ticking for employers who have not adjusted their age-based HR procedures. Age discrimination laws come into force in just five weeks, so everyone with an input to HR must familiarise themselves with the new rules.
Even good employers who already have their house in order may not have considered the need to educate everyone with line management responsibilities in their organisation.
Train your managers now to avoid age-based stereotyping or discrimination after 1 October. The new laws are about creating a culture change in the workplace, so everyone has a part to play, not just HR professionals.
The legislation introduces a number of changes and exemptions in the area of redundancy. The government is removing the lower and upper age limits in the statutory redundancy payments scheme. Under the new regulations, once they have completed the minimum qualifying period of two years, workers under 18 and over 65 will receive the same rights to redundancy payments.
In addition, the taper at the age of 64 is also being removed, so employees aged 64 will no longer see their redundancy entitlement reduced by a 12th every month until they reach 65.
Employers will need to ensure that their selection processes for redundancy are free from age discrimination. For example, practices such as ‘last in first out’ and using length of service in any selection criteria may be discriminatory if they cannot be ‘objectively justified’.
There are some exemptions to the redundancy rules. For example, the government has decided to retain the current age-banded structure of the statutory redundancy payments scheme. Moving to a single multiplier would leave a substantial number of older workers at a disadvantage and we believe this would be unacceptable.
If the employer is paying redundant employees under the statutory scheme, or under an enhanced version of the statutory scheme, they will be exempt from a challenge on the grounds of age discrimination.
However, if the employer’s scheme is significantly different from the statutory scheme, then they will not be exempt from challenge.
An employer in these circumstances will need to consider whether their scheme can be ‘objectively justified’ and, if not, whether to amend it accordingly.
There is some confusion on how the regulations will affect the National Minimum Wage.
The government and the Low Pay Commission are concerned that some employers may make their young workers redundant if they have to pay them the same rate as older employees. We believe it is important to encourage businesses to take on young workers, so employers will be able to use the minimum wage development rates, without fear that this could be illegal.
As the commencement date for the new regulations draws nearer, HR professionals must check all HR procedures which have an age element now, if they have not done so already.
Key changes to redundancy rules
- Lower and upper age limits scrapped for statutory redundancy payments scheme.
- Redundancy entitlements will not taper for employees aged 64.
- Selection criteria must be free from age discrimination.