Consultation on draft Age Discrimination Regulations

On 14 July the DTI published the draft Employment Equality (Age) Regulations 2006 and commenced its final consultation on age discrimination. The Age Regulations are likely to have a significant impact on many businesses and will impose further administrative burdens on employers.

The purpose of the Age Regulations is to prohibit discrimination, harassment and victimisation on grounds of age in relation to employment and vocational training. Although many of the principles of the Age Regulations are familiar in legislation dealing with other forms of discrimination, the Age Regulations will be unique in that the possibility of justification will apply equally to direct and indirect discrimination. The discrimination will be justified when it fulfils a legitimate aim and the particular circumstances make it appropriate and necessary.

The Age Regulations cover many age related issues, including service related pay and benefits and occupational pensions. Two key issues to note are:

Default retirement age of 65

The Age Regulations propose a default retirement age of 65. Retirement ages below 65 will be unlawful unless the employer can show objective justification. However even retiring at 65 will not be that simple as there will be a new procedure for any compulsory retirement of employees at any age. This is the 'duty to consider' procedure, which follows a similar procedure to a request for flexible working. It allows employees to request working beyond a compulsory retirement age. Where the employee makes such a request the employer has a duty to consider it seriously.

Removal of upper age limit for unfair dismissal claims and redundancy rights

The Age Regulations remove the current upper age limit of 65 for unfair dismissal claims and redundancy rights. This means that older workers will get the same rights to claim unfair dismissal or receive a redundancy payment as younger workers. There will be changes in the way statutory redundancy payments and the basic awards for unfair dismissal are calculated. For example there will no longer be a lower or upper age limit of entitlement nor will tapering provisions apply. Age bands will be removed for calculation purposes, although a multiplier will be retained. The level of the multiplier has not yet been determined.

'Planned retirement' will not constitute unfair dismissal. However, a 'planned retirement' requires certain conditions to be fulfilled:

• the retirement is on or after the employee is age 65 (or a lower retirement age, if justified)
• the employer has notified the employee of the retirement at least six months in advance
• the employer has subsequently followed the duty-to-consider procedure
• it is a genuine retirement.

To access the DTI Age Discrimination site, please click here.

The consultation closes on 17 October 2005. The legislation is expected to come into force on 1 October 2006.

Employers will need to review their employment practices and procedures, identifying where changes may be required. Recruitment, application and retirement procedures will need special scrutiny.