Employment News - November 2006
Friday, November 10, 2006
Inside this issue:
The Dawning of a New Age - an Overview of the Age Discrimination Regulations
1 October 2006 saw the dawning of a new age in discrimination law with the Employment Equality (Age Discrimination) Regulations 2006 (“the Regulations”) coming into force. These prevent direct or
indirect discrimination, victimisation and harassment against a worker on the grounds of their age or “apparent age”.
They introduce a National Default Retirement Age of 65. Employers cannot force someone to retire before then, unless this is objectively justified by a “genuine occupation requirement”. However, this will be very difficult to prove. All employees have the right to request to work beyond the age of 65 or any later retirement age set by the Company. In this regard:-
- Employers must give at least 6 months written notice to employees of their intended retirement date.
- Employers have a duty to consider any request which will involve meeting with employees.
- Employees have a right of appeal if they are dissatisfied with the employer’s decision.
There are transitional provisions dealing with those employees retiring after 1 October but before 1 April 2007.
Failure to follow the proper procedures may result in the dismissal being automatically unfair and an additional award can be granted where the minimum notice has not been given.
The upper age limit of 65 for unfair dismissal claims and entitlement to redundancy payments has been removed.
Benefits linked to length of service of 5 years or more are now discriminatory. However, they can be justified if they are made with the intention of “encouraging the loyalty or motivation or rewarding the experience” of staff. In practice, therefore, employers must address the question of why they insist on a minimum of 5 years’ qualifying service. They must also be able to satisfy the requirement that awarding the benefit with a minimum of 5 years service requirement is not a “disproportionate means of achieving a legitimate aim”.
A number of issues arise out of the Regulations relating to recruitment. These are:-
- Asking for a date of birth on an application form is not strictly discriminatory however, should be avoided.
- Employers must be careful when advertising for applicants, avoiding words such as “youthful”;
“experienced”; “energetic”; “mature”. - Avoid requirements for a particular qualification or form of training which, because of the recent date of its introduction, older workers are less likely to possess.
- Under the Regulations employers may be liable for the actions of employment agencies acting on their behalf. Where an agency is used, employers must ensure that they act in accordance with the regulations and any equality/diversity policy.
The Regulations have a wide applicability – employees, workers, trainees, job applicants
and other categories of workers.
Age Discrimination - Some Unanswered Questions
It is not clear what type of analysis will be required in determining whether service related benefits are, in fact, a proportionate means of achieving a legitimate aim.
With regard to the employer’s obligations to consider the request to continue working, it must be assumed that employers are obliged to engage in some type of discussion or dialogue. The Regulations do not state that any reason for refusal of the request must be given. However, failure to discuss the request adequately and consider the alternative options could potentially give rise to a constructive dismissal claim on the basis that the employer is being unreasonable and not addressing the employee’s concerns.
It is also questionable whether or not it could be indirectly discriminatory to allow employees to continue working beyond the age of 65 on a part time basis where generally, the employer would not consider applications for part time working from younger employees or workers.
Whilst it is advisable not to ask an employee for their date of birth on an application form, it is still unclear whether a prospective employer can request details of length of service in a previous job. On one hand, this information discloses the length of time someone has been in the working world, thus an applicant’s age can be inferred from this information. However, it is also indicative of whether there were prolonged periods of employment and the positive inferences that can be drawn from that in determining whether the applicant is a suitable candidate. This latter interpretation seems to be reasonable.
The Regulations also pose difficulties in redundancy selection. Employers can no longer apply length of service as a criterion for selection for redundancy. It is also questionable whether the “last in first out” selection criteria can still be justified. This is on the basis that generally younger workers are likely to be most recently employed and therefore, most likely to be selected for redundancy.
Perhaps in these circumstances, employers should be focusing on the experience and overall performance of the employee and the particular posts which are being made redundant or can be offered a suitable alternative employment.
There is also the rather tricky question of what needs to be done in relation to providing benefits such as occupational pension schemes and private health insurance to all employees, where a number of these schemes have perhaps been capped at the age of 60. It is clear that if there was a restriction placed on these benefits due to an employee’s age would be directly discriminatory and careful consideration needs to be given to withdrawing such benefits or restricting these going forward.
With regard to the default retirement age of 65, the Regulations are already subject to judicial review on the grounds that the default retirement age is itself discriminatory.
Age Discrimination Healthcheck – Actions You Need To Take Now
- Ensure your application forms and job advertisements comply with the regulations.
- Ensure your equal opportunities/ bullying/victimisation and harassment policies refer to age.
- Identify and keep an up-to-date record of all employees and worker’s intended retirement dates.
- Diarise at least 7 months in advance of each employee or worker’s intended retirement date to ensure they are given a minimum of 6 months notice of their intended retirement date and their right to request to continue working.
- Ensure that the minimum statutory procedure is followed when retiring employees.
- Check your redundancy procedures to determine whether any selection criteria are
potentially discriminatory. - Check your service related benefits and consider why a particular length of service of 5 years or above is required and whether this can be justified in terms of the regulations
- Check any other policies to see whether there is any reference to age or length of service, particularly in relation to promotion and/or recruitment.
Employment News Roundup
Clothing & Religious Discrimination
The Muslim classroom assistant, Aishah Ezmi, who was suspended for wearing her veil lost her claim for religious discrimination and for harassment on religious grounds. However, she won the part of her claim relating to victimisation and was awarded £1,100 for that.
Grievance Hearings & “Without Prejudice” Discussions
The general rule is that parties to a dispute can have “without prejudice” discussions to enable them to try to agree a settlement without fear that these discussions will be held against them either in Court or at an Employment Tribunal.
There are circumstances, however, where parties waive their rights to claim such discussions were “without prejudice”. The EAT has now ruled that the fact that an employer did not object to the settlement discussions being detailed at a grievance hearing was sufficient to show that the employer had waived his right to claim that the discussions were made “without prejudice”.
Employers should therefore be cautious in these circumstances. If such discussions do arise, a grievance hearing should be adjourned to enter into “without prejudice” discussions and this should be minuted.
New Construction Industry Scheme
The New Construction Industry Scheme will come into force on 5 April 2007. CIS cards and certificates are being replaced by a “verification” service to confirm whether subcontractors should be paid gross or net, which essentially turns on whether they are employees or self employed sub- contractors.
Legally Enforceable Staff Policies
The Court of Appeal has held that statements relating to enhanced redundancy pay set out in a Staff Handbook, but which were not in an employee’s formal contract of employment, were nonetheless contractual and therefore enforceable by the employees.
The Court indicated that provisions for enhanced redundancy terms are now a widely accepted feature of an employee’s remuneration package. Consequently, employers must be careful to specify whether or not any policies in their staff handbook are contractual.