Age Discrimination And Benefits

How am I protected from age discrimination?

The age regulations make it unlawful for your employer to treat you differently because of your age, unless they have a very good justification. However, relating pay and benefits to your service at work is allowed, even though this may discriminate against younger workers. This is because it is widely accepted that this is valuable in motivating staff, rewarding loyalty and recognising experience at work.

This fact sheet looks at how the age regulations affect pay scales, service-related benefits, employee share schemes, life assurance cover and statutory benefits.

How are pay scales affected by the age regulations?

In most cases your employer will not be allowed to have a pay scale based on age. It may also be illegal for your employer to use length of service as a way of progressing employees up the pay scale. This is because even if younger workers offer the same skills as older workers, they are less likely to have long service. This applies to formal pay scales and more informal arrangements where length of service is used as a factor in awarding pay increases.

However, pay scales relating to a period of five years or less are exempt. Your employer can calculate the five years from the date you started work or the date you started at a particular grade or level, providing this is sufficiently distinct from other grades or levels.

Pay scales relating to periods over five years can be exempt providing your employer can demonstrate that length of service fulfils a business need, for example, motivating staff or retaining skilled employees.

The age regulations do not apply to the National Minimum Wage age bands.

What about other service-related benefits?

Other benefits that depend on a qualifying period of service are treated in the same way as pay scales. For example, if your employer gives employees with four years’ service an extra day’s annual leave per year, this is allowed, But they can only give employees with six years’ service an extra day’s annual leave per year if they believe there is a business benefit to this.

Gifts to employees to mark ‘milestones’ such as ten or twenty years’ service may also be illegal, unless your employer demonstrate that they genuinely believe there is a business benefit to this.

How do the regulations affect employee share schemes?

Employee share schemes are also covered by the age regulations. Generally speaking, schemes must follow the same "five-year" rule: so they are allowed to have service requirements of up to five years, but your employer will have justify anything longer.

Some age-related rules and policies are allowed if they are required by other legislation, for example, tax legislation regarding HM Revenue and Customs approved share incentive plans.

Do they affect my life assurance cover?

If you have been given life assurance cover after you have retired early on ill-health grounds, your employer is allowed to withdraw it when you reach 65, or the normal retirement age that applied when the cover was arranged for you.

What about statutory benefits?

There are no longer any age restrictions for entitlement to statutory benefits. This means if you are employed you are entitled to statutory sick pay if you are over 65. And if you are an employee under 16, you can receive statutory maternity or paternity pay.

What do I do if I have been discriminated against?

Please note that strict time limits apply in respect of bringing a claim. Most claims will need to be brought in the employment tribunal within three months less one day of the treatment you are complaining about. Where that treatment amounts to a continuing course of conduct by your employer, the claim may be brought within three months less one day from the end of the conduct. In some instances, if a claim is lodged out of time, the Employment Tribunal has the power to extend the time limits if it is just and equitable to do so. However, this power should not be relied on. Please note that in most cases, this time limit will no longer be extended where an internal grievance is lodged first as the rules relating to this have recently changed.

You may also need to follow the ACAS Code of Practice on Discipline and Grievance Procedures (which can be downloaded from the ACAS website). This is aimed at assisting parties to resolve disputes within the work place. If your claim is successful but the tribunal considers that you have failed to comply with the Code, your compensation could be reduced by up to 25%. (There are also penalties on the employer if they do not comply with the Code). Please note that the time limit for bringing a claim is not affected by compliance with the ACAS Code. If your claim relates to matters that happened before 6 April 2009, or if it relates to matters that occurred ongoing through 6 April 2009 and you have lodged a grievance or tribunal claim about it, then different rules may apply in relation to grievance procedures and time limits. These issues can be complicated and, again, you should take prompt legal advice if you think you may have a claim.

You are entitled to request your employer to complete a questionnaire to obtain information relating to your complaint. This can be served at any time prior to commencing legal proceedings, or within 21 days of lodging your claim. Once you have convinced the tribunal that an act of discrimination has occurred, and the employer is responsible, it is up to the employer to justify their behaviour.
If a claim is upheld, a tribunal can make a declaration that there has been unlawful discrimination and award compensation. There is no upper limit to the amount that can be awarded.

This will give you some basic information about the laws protecting you from age discrimination at work and how they relate to benefits.

Please be aware that this is not legal advice and if you are concerned about any of the issues mentioned you should speak to a lawyer.

You can contact Russell Jones & Walker's solicitors at enquiries@rjw.co.uk.

For more information you can download this fact sheet to read offline or print.