The final draft of the Employment Equality (Age) Regulations 2006 have been published by the DTI and laid before Parliament. Subject to approval by Parliament, the regulations will come into force on 1 October 2006 although there will be transitional provisions in place until April 2007.

The regulations prohibit direct and indirect age discrimination but provide that both direct and indirect discrimination will be lawful if it pursues a legitimate aim and is proportionate. Although the draft regulations published in July last year contained some specific examples of what might amount to a legitimate aim for these purposes, these have been omitted from the final regulations.

A number of other changes have been made and the principal changes include:

Retirement

  • An employer intending to retire an employee has to notify the employee of the date on which he intends him to retire and that he has a right to request not to retire ("the notification obligation"). The regulations confirm by way of clarification that this duty applies even if the contract contains express provisions dealing with retirement dates and even if the employer has provided information elsewhere about the right to request not to retire. So information contained in a staff handbook will not suffice.
  • If an employee requests not to retire, his request must state whether he wishes the employment to continue indefinitely, for a stated period or until a stated date. This will give employers greater certainty.
  • Provided the employer has complied with the notification obligation, the employee's request not to retire must be made at least 3 months but not more than 6 months before the intended retirement date (previously at least 6 weeks but not more than one year).
  • Where the employer has not complied with the notification obligation, the employee can make the request at any time within 6 months before retirement.
  • There is no longer any requirement that the employer consider the employee's request in good faith - so there is now guidance for employers on how they should treat these requests.
  • The employer is now required to give its decision on an employee's request (or appeal against any refusal) "as soon as is reasonably practicable" following the meeting held to discuss it (previously within 14 days).
  • Appeal meetings must be held within a reasonable period of receipt of the appeal (previously 14 days).
  • A right to be accompanied by a fellow worker at these meetings has been added. Where the employer fails to allow this, the employee can complain to an employment tribunal and may be awarded up to 2 weeks' pay (subject to the statutory cap).
  • The regulations contain complex transitional provisions dealing with cases where an employer has already given notice of dismissal to an employee before 1 October 2006 and which expires before 1 April 2007. These include provision for the employer to be regarded as having complied with the notification obligation where certain requirements are met and they set time limits within which employees must then make any request not to retire.

Service-related benefits

  • The exemption for service-related benefits has been simplified and widened. Length of service requirements for entitlement to benefits will be permitted. However, where the length of service requirement exceeds 5 years, there is an additional hurdle for employers - it must also reasonably appear to the employer that the use of the service criterion fulfils a business need of the undertaking (for example, by encouraging loyalty or motivation, or rewarding experience).
  • There are specific provisions for calculating length of service and an employer may in certain circumstances be able to discount periods of absence in these calculations

Statutory redundancy payments/ basic award

  • As previously announced, the Government has decided to retain the age bands currently used for calculating statutory redundancy payments and the different multipliers will continue to apply to each band. The same is true for calculation of the unfair dismissal basic award.

Enhanced redundancy payments

  • There is an exemption for enhanced redundancy payments so that provided an enhanced scheme adopts the methodology of the statutory scheme (eg by providing for a multiplication of a week's pay per complete year of service), it will be lawful even though the cap on the level of a week's pay is removed.

For a link to the regulations and notes, click here: http://www.dti.gov.uk/er/equality/age.htm

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.