Shake up over age will open up a Pandora’s box of issuesOn 22 Jul 2003 in Personnel Today Previous Article Next Article Comments are closed. Consultation over age discrimination concerns far more than pensions. HRwill be in the thick of it, dealing with issues such as recruitment andtraining, not to mention statutory redundancy pay changesIn the course of just seven days, the Government published a plethora ofconsultation documents that promise to have a major impact on our world ofwork. They cover three vital issues: legislation on age discrimination, informingand consulting employees, and statutory disciplinary and grievance procedures. Each has important practical implications for employers, large and small,and whether or not they recognise unions. They ensure that HR professionalswill have their hands full in determining the changes they need to make totheir organisations’ employee policies and practices. The Government’s plans to introduce age discrimination legislation fromOctober 2006 is likely to have the greatest impact on Britain’s world of work.The law will force a cultural sea change in attitudes about age-related mattersin the workplace. Over recent years, employers have had to cope with the introduction oflegislation covering discrimination on the grounds of sex, race and disability,and they will shortly have to do the same for discrimination on the grounds ofreligious belief and sexual orientation. But it is the age discriminationlegislation that has much wider implications because every employee will beaffected by it. It is encouraging that the Government is consulting on age discriminationlegislation well in advance of its implementation date. It has indicated thatit plans to have the final regulations laid before Parliament by the end of2004. It is imperative the Government adheres to this timetable because employerswill need all the time they can get between the finalisation of new laws andtheir implementation. In view of the difficult pension problems we now face in the UK, it isinevitable that attention has so far concentrated on the impact age discriminationlegislation will have on retirement arrangements. This creates some real,practical issues for companies. The Government has clearly not decided whether to abolish employers’mandatory retirement ages (except where they can be “objectively justified”),or to enable employers to retire an employee at or after 70, without having tojump through hoops to justify the decision. In determining which approach to adopt, the Government must take intoaccount two important considerations. First, the new age discrimination law isthe result of the UK having to fall in line with an EU directive, so theGovernment has to ensure its implementation is consistent with the approachbeing adopted by other member states. If it fails, there is a serious danger thatBritish businesses will be disadvantaged by having to operate in a much morecomplex regulatory environment than their European competitors. Second, the Government must ensure that if it decides to abolish themandatory retirement age, except where it can be “objectivelyjustified”, employers are provided with clear examples of the ‘objectivejustifications’ they will have to make. This will enable organisations toterminate the employment of their older workers in a fair and dignified manner,without having to face the prospect of expensive employment tribunal claims. New age discrimination law will certainly affect employers’ retirementarrangements. But it will also impact on recruitment arrangements, redundancyterms, pay and benefit packages, as well as training and pensions policies. Until recently, the potential impact of new age discrimination legislationon redundancy terms had been largely overlooked. However, the Government’sannouncement that it will also be radically changing the method of calculatingstatutory redundancy pay has really opened up Pandora’s box on the issue. The method of calculating statutory redundancy pay – using a formula basedon an employee’s age and service – has remained unchanged since it wasintroduced by the Wilson Government in1965. Moreover, many companies withsupplementary redundancy payments often model them on the statutory formula. The Government’s proposed changes in the formula for calculating statutoryredundancy pay will result in lower payouts for older workers. Inevitably,employees will put pressure on their employers to make up the difference. Manycompanies with supplementary redundancy payment arrangements will probably beforced to reopen discussions with employee representatives on a subject that maynot have been on the agenda for some time. The problems surrounding redundancy payments is just one indication of thecomplex set of issues surrounding the implementation of new age discriminationlegislation. It demonstrates how important it will now be to have a wide-ranging publicdebate about the best way to implement this important piece of employmentlegislation, so that it does not damage business competitiveness in the future.By David Yeandle, Deputy director of employment affairs, EngineeringEmployers’ Federation Related posts:No related photos.