Withers Worldwide

The Employment Equality (Age) Discrimination Regulations 2006 (‘the Regulations') came into force on 1 October 2006. 

The Regulations protect:

• old and young;
• employees, workers (including contract workers), paid office-holders and partners (amongst others);

in all elements of the working relationship, including:

• recruitment;
• benefits;
• redundancy packages; and
• retirement.

Most employers will need to change their practices and policies to be compliant.

What is age discrimination?

The key concepts of age discrimination are familiar from the existing discrimination laws:

direct discrimination - treating someone less favourably because of their age (or perceived age)

indirect discrimination - applying a criteria or practice with which it is more difficult for certain age groups to comply

victimisation - treating someone less favourably because of their involvement in a complaint of age discrimination

harassment - on the grounds of age, engaging in unwanted conduct which has the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. 

A key difference is that direct or indirect discrimination will not be unlawful if it can be shown to be ‘a proportionate means of achieving a legitimate aim'.  However, we anticipate that it will be difficult to establish this defence.

Recruitment

Employers will need to ensure that decision-making is not tainted by age related concerns or, if they are, that such concerns are objectively justified.

Advertising

In Ireland (where age discrimination has been unlawful since 1999) employers have lost cases where they have advertised for: ‘a young and dynamic professional'; ‘young, confident, enthusiastic' salespeople; and applicants with ‘ideally not more than 2-3 years experience in a commercial environment'.  The first two examples are fairly obvious, but the third is less so. Any requirement for a period of experience could indirectly discriminate against younger applicants and therefore, to remain lawful, must be objectively justified; ideally, employers should avoid referring to length of experience altogether and instead concentrate on the actual skills required for the job.

Application forms

Whilst it will be acceptable to ask for an applicant's age on a diversity monitoring form, employers should resist asking for this information on the application form itself. The applicant's age should be kept separate from the application form and not shared with the interview panel at all.

Interviews

Interview questions will need to be rethought, especially coded age-based questions such as: ‘Do you really want promotion at this stage of your career?' or ‘Do you think you are overqualified?' Employers should be mindful to keep interview notes and be prepared to produce them at tribunal if challenged.

Benefits

Employers will still be able to allocate holiday, sick pay and other benefits based on length of service, subject to one proviso: if a worker whose service exceeds 5 years is disadvantaged, then it must ‘reasonably appear' to the employer that the way it uses the criterion of length of service ‘fulfils a business need', for example ‘by encouraging the loyalty or motivation, or rewarding the experience, of some or all of its workers'.  This is a subjective test and, provided the matter has been thought through and evidenced properly, employers should be able to stay on the right side of the law.

Redundancy packages

When designing redundancy selection criteria, employers will have to avoid criteria based on length of service (for example, ‘last in first out') and instead focus on measurable competencies such as performance, skills and attendance.

The statutory redundancy pay scheme is changing slightly.  Both the upper and lower age limits (generally 18 and 65), and the tapering provision (whereby the payment reduces between the ages of 64 and 65) are being abolished.  However, contrary to the initial proposal, the three age bands will remain (below 22, 22 to 40, 41 and above).

Employers will still be able to make enhanced redundancy payments, provided these are based on the statutory scheme.  So, for example, employers may:

• raise or remove the maximum amount of a week's pay (currently £290); and/or
• multiply up the appropriate amounts used for each age band; and/or
• multiply the total amount by a figure of more than one;

provided it does the same for each of the three age bands.  It will also be lawful for employers to make redundancy payments to employees with less than 2 years' service (who are not therefore entitled to a statutory payment), and to those taking voluntary redundancy, provided the principles above are applied.

Retirement

Individuals aged 65 or over will be able to claim unfair dismissal as well as age discrimination.  However, it will be possible to dismiss employees lawfully for ‘retirement' provided the appropriate procedure is followed.  It will also be lawful to refuse to recruit employees aged 65 or over.

The initial draft Regulations gave employees the ability to challenge the genuineness of their retirement, but the final Regulations have excluded this option.  Now, employers have to do relatively little to ensure that a dismissal is deemed to be by reason of ‘retirement' (see below).

Meaning of ‘retirement'

Retirement has become the sixth potentially fair reason for dismissal.  Whether or not retirement is deemed to be the reason for dismissal will depend upon whether the employer has a normal retirement age (‘NRA') and whether or not dismissal is taking place below, at or above 65.

Where there is no NRA

If the employer seeks to retire the employee before the age of 65, ‘retirement' will not be the reason for dismissal. 

If it seeks to retire the employee at or after 65, ‘retirement' will be the reason for dismissal provided the employer follows the notification requirement below, and the dismissal takes effect on the intended date of retirement (‘IDR').

Where there is an NRA

If the employer dismisses before the NRA, ‘retirement' will not be the reason for dismissal. 

Where the NRA is below 65 and the employer is considering retiring the employee at or after such NRA, it will need to objectively justify this decision for ‘retirement' to be deemed to be the reason for dismissal. 

If the NRA is 65 or higher, then, provided the employer follows the notification requirement below, and the dismissal takes effect on the IDR, then ‘retirement' will be the reason for dismissal.

The notification requirement is that the employer notifies the employee in writing of (a) the IDR and (b) the employee's right to make a request to work beyond the IDR.  This written notification must be given not more than 1 year, and not less than 6 months, before the IDR. There is some statutory flexibility around this timescale but it would be imprudent for an employer to rely on this.

Retirement procedure

If the employee makes a written request to work beyond the IDR (in the prescribed form and in the prescribed timescale, which is generally between 3 and 6 months before the IDR), then the employer has a duty to consider that request.  This procedural duty can be summarised as follows.

• Meeting: The employer must normally hold a meeting to discuss the request within a reasonable period after receiving it.
• Decision: The employer must give the employee written notice of its decision as soon as reasonably practicable after the meeting. If the request is refused, the notice must confirm that the employer wishes to retire the employee on the IDR, and inform him of his right to appeal; however, oddly, it need not actually specify a reason for the refusal.
• Appeal meeting: If the employee lodges a valid appeal, the employer must normally hold another meeting.
• Appeal decision: Once again, the employer's decision (this time final) must be given in writing. 

At both meetings, the employee has the right to be accompanied by a fellow worker.

If the employer complies with this duty in full, the dismissal will automatically be fair; if not, the dismissal will automatically be unfair.  Retirement is the only reason for dismissal to which the principle of automatic fairness applies.