19 September 2006 Victoria Willson
New legislation will prohibit age discrimination on the basis of actual or perceived age. Victoria Willson, solicitor for the employment group at KSB Law LLP, explains the ins and outs of the Employment Equality (Age) Regulations, which come into force on 1 October 2006.
The new legislation does not just concern old people; it applies to both young and old alike throughout their working lives. It will cover both employment (which includes recruitment) and vocational training. It is also relevant to both the private and public sectors and every organisation.
Skills, experience and the ability to do the job are what is important - not someone's age.
Therefore, employers will need to adopt age-positive practices. It is essential that management, and those involved in teh recruitment process, familiarise themselves with the terms and provisions of the new regulations.
It is also essential that employers review their employment policies and procedures to ensure that they are compliant.
It does not take long for the consequences of non-compliance to bite. Take the example of the Republic of Ireland, where allegations of ageism now make up 19% of formal discrimination claims. Defending these cases is proving highly costly for employers. However, it does not have to be this way – just be prepared.
WHAT IS PROHIBITED?
The regulations prohibit both direct and indirect discrimination, harassment and victimisation. However, unlike other types of discrimination legislation both direct and indirect discrimination can be justified under the regulations.
To justify age discrimination the employer will need to show that the less favourable treatment, provision, criterion or practice is a proportionate means of achieving a legitimate aim.
Direct discrimination may pursue a legitimate aim for reasons such as health and safety, encouraging and rewarding loyalty and training requirements.
The discriminatory treatment will need to be proportionate even if it does pursue a legitimate aim. Therefore, an employer seeking to rely on justification will need to provide clear evidence in support of its actions. Economic factors alone will not be sufficient reason.
As with other areas of discrimination, it is not only those who harass that are at risk of facing claims – there is also a vicarious liability upon the company that employs them. It is not enough for companies to claim that comments or actions were unauthorised.
To avoid liability, firms must show that they have taken all reasonable steps to prevent harassment, that staff are aware that harassment will not be tolerated and that a complaints (grievance) process is in place for staff who feel that they have been harassed.
It will be unlawful for an employer to discriminate against job applicants and employees on the grounds of age during both recruitment and employment (i.e. promotions).
There is an exemption for employers with respect to the recruitment of older workers. It will not be unlawful to discriminate against job applicants whose age is greater than the employer's normal retirement age (or if there is none, the default retirement age is 65) or who would, within a period of six months of applying for employment, reach that age.
Recruitment material should avoid references to age or age ranges unless employers can show objectively that it is appropriate and necessary to apply an age criterion to a job.
Take care with the wording of advertisements. Avoid words that could imply age, such as 'mature', 'youthful', 'modern', 'senior', 'recent graduate' or even 'experienced'. If you use graduate schemes, avoid criteria such as 'under 25'.
In Ireland it was widely held that Ryanair's advertisement for a 'young and dynamic professional' was discriminatory, even though it was argued that 'young' had been used to indicate a state of mind rather than an actual age. Ryanair was fined IR£8,000.
Promotion criteria should be age neutral. They should focus on competency and skills, rather than factors such as length of service or the age of the individual.
Unless they can be justified, businesses should remove artificial barriers to promotion such as maximum and minimum ages.
The ages of those applying for, and receiving promotion should be monitored.
Providing benefits based on the length of service of an employee is potentially discriminatory, although the regulations do contain some exemptions.
For example, a length of service criterion for awarding benefits will be allowed if it is for five years of service or less.
An employer may also allow a length of service criterion for awarding benefits where it reasonably appears to the employer that there will be a business advantage from rewarding loyalty and the benefit is awarded to all of the employees who meet the length of service requirement and whose circumstances are not materially different.
ENHANCED REDUNDANCY PAY
For a payment to qualify as an 'enhanced redundancy payment' and be permissible under the regulations it must be based on the method of calculating statutory redundancy pay (SRP).
Therefore, a scheme that pays double SRP will be permissible, but a scheme that pays all employees a multiple of their salary based on their years of service will not be permissible as it does not follow the SRP model of calculation.
PENSIONS AND RETIREMENT
The regulations also generally permit most age-related rules and practices under occupational pension schemes, which will still be able to set minimum and maximum ages for joining the scheme (provided the scheme is carrying out retirement benefits activities as defined by section 255 of the Pensions Act 2004).
The regulations provide a default retirement age of 65. Enforced retirement below age 65 will generally be unfair dismissal (unless it can be shown to be a 'proportionate means of achieving a legitimate aim').
Provided that the prescribed procedure set out in the regulations is followed, it will generally be lawful to require an employee to retire on or after his or her 65th birthday.
An employee can request to continue working beyond the age of retirement and again the regulations state the procedure to be adhered to. The employer must inform the employee of his or her right to request to continue working. The employer has a duty to consider the request but is not obliged to accept it.
Failure to notify the employee of his or her intended retirement date and the right to request to continue working less than six months but more than two weeks in advance of dismissal may lead to an award of compensation of up to eight weeks' pay to the employee.
If the employer fails to notify at least two weeks in advance of dismissal, or no notice is given at all, the dismissal will be unfair. The regulations provide set procedures for meetings, appeals, notifications and deadlines. The existing statutory dismissal procedure will no longer apply to retirement dismissals.
There are complicated transitional provisions for retirement that will take place between 1 October 2006 and 1 April 2007.