As promised last month, this month’s Cripps Alert will look at the draft Employment Equality (Age) Regulations.

Why, you may ask are we looking now at draft regulations that are not due to come into force until October 2006? These regulations introduce a new area of discrimination that will impact upon all aspects of the employment relationship from recruitment to retirement and even after employment has ended. The regulations are still in draft and their form may change, but the underlying policy behind the rules is settled. However, rather than going through the draft regulations one by one, this article will concentrate on what you should be doing now.

Recruitment and application procedures

Do you advertise for ‘young’ or ‘mature’ people to fill your vacancies? This kind of language will be unlawful under the new regime. It is suggested that ‘dynamic’ and ‘energetic’ infer a younger applicant and will therefore also be unlawful.

Do your job application forms ask for details of an applicant’s age or date of birth? Whilst asking for such information is not of itself a form of age discrimination, it could be used by employers to make decisions that are based on age and so discriminatory. The DTI therefore recommend that questions regarding age be moved to a diversity monitoring form (which those who take the recruitment decisions would not get to see).

You will need to be careful if you require a certain length of experience or qualification for a position. To state this could amount to indirect discrimination, as it is likely to be harder for younger candidates to fulfil. In order to justify such a requirement, an employer would need to show a real need to have such experience or qualification to carry out the particular role.

Employers will need to look at how managers who interview and appoint new employees are trained to avoid these pitfalls.

Employment rules and procedures

The key area employers should be looking at now is employment benefits that are related to length of service. It is not uncommon for an employer to increase the amount of holiday entitlement an employee receives in line with their length of service. Similarly, benefits such as private health insurance are often only available to employees who have accrued two years’ service. Such provisions will potentially indirectly discriminate on the ground of age: older age groups are more likely to have longer periods of service and therefore more likely to qualify for the benefits. However, the Government has decided that it would be unnecessarily bureaucratic for employers to have to justify the provision of service-related benefits where the period of service required is less than five years. They were concerned that to do so would lead to many employers withdrawing the benefits altogether. The draft regulations permit the provision of benefits that are linked to length of service of five years or less. Where provision of a benefit is linked to a longer period of service, the employer will need to justify the position.

Where a length of service requirement mirrors a similar requirement in a statutory benefit, that will be permitted.

Given these likely changes, it is sensible for employers to review their service related benefits now. If you have any benefits that are linked to a period of service of more than five years (and not linked to a statutory benefit) you will need to consider whether you can justify the position. If not, you will need to look at changing the service requirements before October 2006.

Redundancy schemes

Employers should also now review enhanced redundancy pay schemes. Under the draft regulations, it is proposed to remove the upper age limit and the age bands from statutory redundancy pay. However, the two-year qualifying period and the 20-year cap are to be retained. The multiplier has not yet been determined, but a multiplier of one week has been suggested.

Enhanced redundancy schemes often mirror the provisions for the calculation of statutory redundancy pay. As the statutory rules are due to change, employers will need to update their schemes to reflect them.

Retirement procedures

One of the ‘headline’ issues to come out of the draft regulations is the default retirement age of 65. Although it is always open to employers to set a higher retirement age, employers who wish to compulsorily retire employees below the age of 65 will need to objectively justify such a decision. Employers need to look now at their retirement provisions. If you currently have a retirement age below the proposed 65 year threshold, you will need to consider whether you can justify the position and, if not, you will need to set it at 65 for both men and women.

Employers should also start thinking now about the new ‘duty to consider’ procedure on retirement. The draft regulations, propose that an employer must notify any employee approaching retirement of that fact no more than 12 months and not less than 6 months before their retirement is due. The employee then has the right to request to continue working beyond the retirement date and the employer is required to consider such request. This right reflects the existing right to request flexible working. Should an employer not follow this procedure, they may find themselves facing a claim for automatic unfair dismissal. To avoid this, employers need to put in place a system to alert them about employees coming up to retirement age. This suggests that it would be a good idea to have a general audit of the workforce to see how many employees will be affected when the new rules come into force.

Audit older employees

The draft regulations remove the current upper age limit of 65 years on bringing an unfair dismissal claim. Employers should consider now whether they have employees over the age of 65 about whom they have concerns relating to performance or conduct. In the past, employers have often ignored such concerns on the ground that employees over normal retirement age cannot claim unfair dismissal. That position is about to change. You should audit older employees now and tackle any performance or conduct issues before the employees gain unfair dismissal rights.

Training

A key element of any discrimination claim is the form of training given to those managers making the decision that has been challenged. It is therefore important that you review your training programmes and put in place age discrimination training for appropriate employees before the new regulations come into force.

What next

The consultation period ends on 17 October 2005 and it is expected that the final regulations will be available early in 2006. It is clear however, that in order to steer a clear course through this new form of discrimination, work must begin now.