Employment Alert No. 116: Age Discrimination - The New Regulations
March 13, 2006
| The New Regulations |
The new age discrimination regulations released on 9 March 2006, once approved by Parliament, will come into force on 1 October 2006. The regulations prohibit age discrimination and will affect many areas of the employment relationship including recruitment, promotion, benefits, pensions and retirement.
The new regulations will be wide ranging and will have the following consequences:
- Employers will not be able to treat employees less favourably due to their age, unless they can objectively justify the treatment.
- Employers can still have (and enforce) a retirement age for their employees, but this cannot be below 65 unless a lower age is justified, which will be very rare.
- Employers who want any employee to retire at or after 65 will be required to notify employees in writing and at least six months in advance of their intended retirement date (even if a set retirement date is specified in the contract).
- Employers will be required to consider an employee’s request to continue working beyond retirement based on a meeting or written representations and subject to a specified procedure (including an appeal).
- Currently, employees above the normal retirement age cannot claim unfair dismissal and are not entitled to a redundancy payment. However, this upper age limit will be removed. Dismissed workers over 65 will have the right to claim unfair dismissal and to receive a redundancy payment where redundancy is the reason for dismissal.
- “Retirement” dismissals will be automatically unfair unless the notification and request procedure is followed. As the regulations are complex, we expect plenty of litigation in which employees argue that some procedural problem means the dismissal was unfair. Maximum compensation for unfair dismissal is currently £58,400, but such claims are likely to be brought in tandem with other age discrimination claims (such as harassment) for which compensation is uncapped.
- The regulations include provisions affecting service-related benefits and occupational pensions.
| What does this mean for Employers? |
The scope of the regulations means that all employers will be affected by them to some degree. Every employer needs common sense advice about the effect of the new rules on their business. Employers should now assess how the law will impact their policies, practices, procedures, and terms and conditions. Retirement procedures should be first in line for review given that new transitional provisions in the regulations have a direct impact on any retirement notices given now which expire after 1 October 2006.
Employers should also start management training before the regulations come into force to avoid claims which could arise from a lack of understanding.
The regulations are complex and, in our view, ambiguous in parts. We are hosting a free seminar (details below) where we will be discussing the regulations, their impact and the potential complexities in detail. We hope you will be able to join our debate.
| Seminar Details |
The seminar will take place between 5.00 pm and 7.00 pm on Wednesday, 29 March 2006 at McDermott Will & Emery UK LLP, 7 Bishopsgate, London EC2N 3AR.
If you would like to attend, please contact Dawn Church on 020 7577 3435 or e-mail dchurch@europe.mwe.com.
