The official age discrimination regulations will not come into force until
2006. But, as pointers from the Government’s consultation document indicate,
their implications will have a far-reaching impact on UK plc. Melanie Kerr
reports
‘Age discrimination happens because assumptions are made about employees
or prospective employees – young and old – that are based on inaccurate,
outdated and inappropriate stereotypes. Such attitudes work against the
interests of the individual, the workforce and employers. They get in the way
of creating prosperity for all.’ Equality and Diversity: Age Matters – Age
Consultation 2003.
In recent years, employers have frequently been required to adapt their
policies and procedures to reflect new legislation and the way it is
interpreted by the tribunals and courts. This has often involved a considerable
amount of time reviewing the implications of new legislation/cases, amending
policies to reflect these changes, informing staff of the policy changes and
carrying out training where required.
Perhaps the most significant change in recent years is age discrimination,
which is due to become unlawful in 2006. The Government estimates the initial
implementation cost for businesses across the UK will be in the region of
£150m, with annual costs of around £100-400m annually thereafter. It compares
this with the potential quantifiable benefits to employers, which have been
estimated in the region of £600m in the 10 years following implementation.
The Government has already started consulting on the terms of the
regulations, more than three years before they are due to come into force. The
implications of the regulations are far reaching.
Imagine a working life with no retirement age or upper age limit for
claiming unfair dismissal. What will happen when an individual reaches 65? The
answer is that, in all probability, they will be able to carry on working until
dismissal. Dismissal could potentially be on grounds of retirement (although
what the criteria for this would be remains to be seen), or any of the existing
five potentially fair reasons for dismissal.
This could clearly lead to the scenario where a 68-year-old long-serving
worker is dismissed on grounds of capability – which probably won’t leave them
with the same warm feeling as the traditional retirement party and gold
wristwatch.
The main points contained in the Government’s consultation document are set
out below. While the content of the regulations is far from certain, the
consultation document provides some interesting insight as to what they may
contain.
Scope
The regulations will provide protection to workers, applicants and former
staff, as well as some office holders and members of trade or professional
bodies. They will extend protection to students undertaking vocational training
in further and higher education institutions.
Key points
The regulations concerning age discrimination will largely follow the form
of other anti-discrimination legislation, with direct and indirect
discrimination becoming unlawful. It will be against the law to discriminate
against someone not only on the grounds of their actual age, but also of their
perceived age. Victimisation and post-employment discrimination will also
become unlawful.
The recently introduced statutory definition of harassment will be adopted
in the regulations. To bring a successful claim under them, a worker will have
to show they were subjected to unlawful treatment which had the purpose or
effect of either violating their dignity, or creating an intimidating, hostile,
degrading, humiliating or offensive environment for them. It is worth bearing
in mind that when a tribunal is considering whether the actions can reasonably
be considered as having this effect, it can take all the relevant circumstances
into account, including the worker’s own perception.
Positive action will be encouraged. An example of this would be an employer
advertising for jobs in publications read by 20- to 25-year-olds, where that
age group is under-represented in the workforce. Selecting a candidate at
interview because of their age would amount to positive discrimination, and
would therefore be unlawful.
Retirement age
In relation to retirement, the main question in the Government’s
consultation document is whether there should be any set retirement ages at
all. The options are:
– A default retirement age of 70
– The possibility of employers being able to set retirement ages for their
particular businesses, if they are able to justify doing so (this would be the
exception rather than the rule)
– No defined retirement ages.
Clearly, the results of the consultation on this particular point will be
keenly awaited. The final conclusion may be a combination of all these
suggestions. For example, the Government may decide on no defined retirement
ages, other than in exceptional circumstances where an employer in a particular
industry can demonstrate it has a particular requirement for individuals to
retire at a certain age (the consultation document confirms this is currently
the preferred view). A retirement age would have to be justified by reference
to the stated aims set out in the regulations (see left).
Redundancy payments
The calculation of redundancy payments, which are currently based on age,
length of service and the person’s weekly wage (up to a current cap of £260 per
week for statutory redundancy payments), will from the enactment of these
regulations be calculated with reference to length of service and weekly wage
only. Service under the age of 18, which is currently excluded, will be
included.
During the consultation period, views are being sought on whether there
should be an upper age limit for entitlement to a redundancy payment and, if
so, whether this should be the default age of 70, or any normal retirement age
set (and justified) by an employer.
Unfair dismissal
Under the proposals, retirement will become a potentially fair reason for
dismissal. Accordingly, an employee aged 65 or over will be able to claim for
unfair dismissal.
The employer will then be called upon to demonstrate that it acted
reasonably in dismissing the worker for this reason.
When awarding compensation in all claims of unfair dismissal, for whatever
reason, the basic award will be calculated in the same way as the revised
statutory redundancy payment (see above).
Recruitment, selection and promotion
Age discrimination in recruitment, selection and promotion will become
unlawful, unless it can be justified by the employer (see box, left). This does
not automatically allow employers to argue, for example, that they need to
recruit candidates of at least X years of age because a minimum of Y years’
worth of management experience is required for the position. Rather, employers
must be able to justify why that particular post requires a person with that
amount of experience.
Where a lengthy period of training is required for a position, an employer
may be justified in seeking only candidates under a certain age, so it has the
opportunity to obtain the benefit of the training.
The Government has indicated that it "expects decisions on selection,
recruitment, promotion, training needs, etc to be based on merit and
competence, not because a person has reached an arbitrary chronological
age."
An employer may also seek to argue that there is a genuine occupational
requirement (GOR) for a worker in a particular position to be of a certain age.
The consultation document confirms the positions for which this argument will
be accepted will be extremely limited, and the onus will be on the employer to
demonstrate the GOR.
Pay and benefits
Any other pay or non-pay benefits attached to employment which are linked to
age or length of service will require justification. An employer may be able to
justify why a bonus is linked to the length of service of an employee. It will
be more difficult to justify a person’s age being a factor in this.
What will not be affected?
The Government has expressly stated that the following will not be affected
by the new rules on age discrimination:
– State benefits and similar schemes, such as job grants and tax credits
– The different rates for workers under/over 22 years old, contained in the
National Minimum Wage Act 1998
– The particular rules for young staff contained in the Working Time
Regulations 1998
– The minimum age for admission to occupational/state pensions.
Enforcement
The regulations will be enforced by way of a claim to the employment
tribunal when dealing with discrimination against a worker, and by way of a
claim to the county/sheriff court in relation to discrimination against a
student.
Given the expansion of the grounds on which a person can be discriminated
against (discrimination on the grounds of sexual orientation and religion and
belief becoming unlawful from December 2003), the Government is again mooting
the idea of having one regulatory body. This would integrate the existing
regulatory functions, carried out by the CRE, EOC and DRC, and also have
responsibility for enforcing the new discrimination legislation.
This proposal certainly has merit, especially in light of the recent moves to
streamline the definitions within discrimination legislation.
As with other discrimination legislation, it is likely that there will be
provision for questionnaires to be served by parties who consider they have
been discriminated against. These will probably include the new eight-week time
limit for responding. Failure to reply to the questionnaire within this time
limit, or responding in an ambiguous or equivocal manner, could lead to an
adverse inference of discrimination being drawn by the tribunal.
Melanie Kerr is an employment partner at Harper Macleod
Justification
If an employer intends to treat
people differently on the grounds of age, it must be able to justify doing so
by reference to specific aims, and only if it is appropriate and necessary in
the particular circumstances. The onus will be on the employer to produce
supporting evidence; merely asserting that this was the reason will not be
sufficient.
The specific aims likely to be stated in the regulations are:
– Health, welfare and safety, ie the protection of young workers
– Facilitation of employment planning, for example a business
with a number of people approaching retirement at the same time
– Training requirements of the post in question. The example
given in the consultation document is of four air traffic controllers who
undertake 18 months’ theoretical and practical training, followed by further
training when in the workplace
– Encouraging and rewarding loyalty
– The need for a reasonable period of employment before
retirement
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Timetable
Consultation on the scope of these
regulations will continue until October 2003. Further consultation on the draft
regulations will take place next year, before the draft regulations are laid
before Parliament at the end of the 2004, well before they come into force on 1
October 2006
