October 5, 2006
On October 1st, 2006 the Employment Equality (Age) Regulations 2006 (the "Age Regulations") came into force. The Age Regulations introduce the first anti-age discrimination laws in the United Kingdom ("UK").
The Age Regulations supplement existing UK anti-discrimination laws covering areas such as disability, race, ethnicity, religion or belief, gender, marital or civil partnership status, gender reassignment, sexual orientation, pregnancy and maternity leave.
This publication will focus on the impact of the Age Regulations on employers in the UK, although the Age Regulations also impact in areas outside the employment field.
What is age discrimination?
Types of age discrimination include:
Treating an employee less favourably than another on grounds of age (or perceived age) ("direct discrimination");
Applying a provision, criterion or practice which (whilst apparently age neutral) puts or would put a particular age group at a disadvantage ("indirect discrimination");
Subjecting an employee to harassment on grounds of age; and
Treating an employee less favourably on grounds that he or she has in good faith brought or threatened a claim of age discrimination or supported another in so doing (known as "victimisation").
Age discrimination in employment
Employees, and candidates for employment, are potentially protected against discrimination at all stages of the employment relationship and regardless of age. Particular areas of risk include recruitment, training, pay and benefits, promotion and, of course, dismissal.
Employers who takes steps to prevent discrimination through education and training and by implementing and enforcing appropriate policies and practices may successfully avoid liability for the unauthorised acts of employees who discriminate against colleagues or subordinates.
Importantly, an employee who is considered to be "too young" is entitled to as much protection as an employee who is considered to be "too old".
Can age discrimination be lawful?
In certain circumstances yes. Both direct and indirect discrimination are potentially lawful as a means to achieve a legitimate aim of the business. The UK Government has issued guidance which suggests that potential legitimate aims include health and safety, succession planning, training and rewarding loyalty. Expect early cases to focus on this area.
Age discrimination will also be justified where, in certain limited circumstances, the employer can show that there are genuine age requirements for the job in question. Will fashion clothing retailers be justified in recruiting young sales staff in order to promote a youthful image? Will movie studios be entitled to specify the age of actors sought for a particular part in a movie? We await answers to questions such as these from the UK courts.
Service related benefits
Notwithstanding the potential for indirect discrimination, a more relaxed approach is taken in the Age Regulations to the provision of service related benefits. Employers need not concern themselves with service related benefits provided to employees with 5 years service or less. Thereafter differences in service related benefits must serve a legitimate business need. Special rules also apply to enhanced redundancy schemes.
Age discrimination and retirement
The Age Regulations do not impact upon employees who wish to retire voluntarily. Employers who impose retirement upon an employee below the age of 65 will face a potential claim of age discrimination while those who impose retirement upon an employee aged 65 or over will, before doing so, be required to follow a detailed notification and communication procedure laid down in the Age Regulations. The Age Regulations also impact in the area of UK Pensions.
Impact of non-compliance
The Age Regulations are enforced through litigation in the UK employment tribunals. The remedy in most successful cases will be an award of compensation. In common with other areas of anti-discrimination protection, compensation may reflect the full extent of the employee’s losses (including financial losses, personal injuries and injuries to feelings) and will, in some cases, be significant.
Protecting your business
Employers should take the following steps to manage the risk of age discrimination claims:
Review the compulsory retirement provisions in your UK business;
Review your Human Resources manuals, policies, practices and procedures as they apply to UK employees (in particular, appraisal processes, benefit plans, disciplinary, grievance and equal opportunities procedures, pay structures, pensions plans, recruitment, redundancy, promotion, training and retirement policies and practices);
Implement appropriate training for management and anyone else involved in recruitment, training, appraisals, promotion, disciplinary and grievance processes and dismissals; and
Ensure that compulsory redundancies are handled in accordance with the notification and consultation procedures in the Age Regulations and obtain legal advice before addressing any age related issues with UK employees.
We will, of course, be delighted to assist you in this process. Please contact the Gibson Dunn attorney with whom you work, James A. Cox, our UK Labour and Employment Partner (+44 (0)20 7071 4250, [email protected]) in the firm’s London office, or Gibson Dunn’s Labor and Employment Practice Group Co-Chairs Eugene Scalia in Washington, DC (202-955-8206; [email protected]) or Deborah Clarke in Los Angeles (213-229-7903; [email protected]).
© 2006 Gibson, Dunn & Crutcher LLP
The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.