Fact Sheet

Age discrimination laws introduced October 2006.

From October this year new legislation will make age discrimination in employment illegal but recent research has indicated many small to medium size businesses are still unprepared for the changes.

The new laws will inevitably lead to an increase in Employment Tribunal claims, especially as compensation awards in discrimination cases can be unlimited.

Claims can involve workers of ANY AGE if the alleged victim believes they have been discriminated against in treatment related to recruitment, promotion or training.

The Employment Equality (Age) Regulations 2006 will come into force on 1st October 2006.

The primary effect of the new Regulations upon employers is as follows:

What employers should do to prepare for the new laws:

Prudent employers will have updated equal opportunities policies and retirement procedures in place by the time the Regulations become law. Training, promotion opportunities and employee long service benefits must be reviewed. Entry criteria to retirement benefit, pension and health schemes must be examined. Recruitment policies and interview criteria must be reviewed. Retirement ages must be changed to not less than 65.

An equal opportunities policy that includes age discrimination, a suitable retirement clause for contracts and letters to use during the retirement procedure are all included as part of the Lawrite Employment Law software, version 20, together with a guide to age discrimination legislation.

To ensure compliance with the new legislation, as well as all other relevant employment legislation, and to be able to produce contracts of employment and full staff handbooks for your employees, employers should subscribe to the Lawrite employment Law service. The service includes 24/7 legal support so you can talk to one of our team of solicitors or barristers by telephone for advice about employment law, commercial law or health and safety law.

Impact on Payroll:

The changes that directly impact on payroll relate to statutory sick pay (SSP) and redundancy pay. Once the regulations come into force the lower (16) and upper (65) age limits for SSP will no longer apply. Also, although someone might not be entitled to SSP up to 30th September, after 1st October they will be entitled and their period of incapacity for work will begin anew on that date.

Statutory redundancy pay has also had the lower and upper age limits removed, although the age-banded system remains in place.

Apart from these areas which relate directly to payroll, other areas that the regulations could impact on which pay rollers need to be aware of are pensions, benefits and rewards, holiday, retirement and recruitment, basically anything that has a time frame on it.

With benefits you need to be aware of any length of service based rewards. You can’t really offer anything that is based on more than five years service. These schemes will become obsolete because they will be deemed to be indirectly discriminatory. If your length of service requirement is under five years you are probably alright, but keep a three-year maximum just in case. You will also need to show that the company needs to reward loyalty and that the benefit does so.

With recruitment, not only will you need to remove any questions relating to age on application forms (payroll will obviously need this information if they join the company) but you will need to be careful what words you use on application forms. Make sure you do not use words that could be seen as discriminating against certain groups; for instance mature could mean you are discriminating against younger applicant.

One element that you need to act on now is the company’s retirement policy, so that you are ready for anyone whose birthday means they reach retirement age shortly after the regulations come into force. The legislation includes a transition period, which says if an employee’s birthday falls between 1st October and 1st April 2007 you can give them their statutory notice period rather than six to 12 months notice.

In Summary, the main provisions are as follows:

In Summary, what needs to be done?

What is the bare minimum and best practice options available to ensure you are prepared for the Regulations that came into force on 1 October.

Bare minimum:

Best practice extras: