The new age discrimination regulations, published in draft form today, might not achieve their aim of keeping older employees in the workplace, law firm Eversheds has warned.
From October 2006, a default retirement age of 65 will be introduced. But, if an employer wishes to retire an employee, either before or after 65, they will have to follow the new “planned retirement” process.
Employers have to give staff six months’ notice, but employees will have the right to lodge a request to stay up until six weeks before their proposed finishing date.
Owen Warnock, employment law specialist at Eversheds, said the proposals fail to address the fact that there are often additional costs associated with older workers.
“For example, it is more expensive to provide health insurance for those over 65, but cost alone will not be an acceptable reason for withdrawing a benefit under the new regulations. This could act as a disincentive to retaining or recruiting older workers,” he said.
“What’s more, the tight timescales under the new planned retirement scheme to deal with requests by employees to stay may make it easier for busy managers simply to say ‘no’ rather than find the time at short notice to consider the practicalities of the request.”
The draft proposals were due to be published in October last year, giving organisations two years to prepare before they come into force. With less time to prepare, Eversheds is advising employers to address their policies towards age immediately.
“HR managers now have a lot of work to do to ensure their organisation is adequately prepared,” Warnock said. “All policies will need to be scrutinised to ensure that benefits are service-related and not age-related.
“For example, it would be okay to reward five years’ service with an extra day’s holiday, but it will no longer be permissible to give extra holiday when an employee reaches a certain age unless exceptional justification can be proved.”
However, the legislation isn’t just about amending policies, Warnock added.
“Attitudes about what jobs are suitable for what age of employee won’t change overnight and this is where most businesses will be vulnerable to breaking the regulations,” he said. “In order to adequately prepare, this legislation needs to be understood beyond the senior management team and HR department.”