The question
The way that our business is currently set up is as an Industrial Provident Society, which means that employees can buy a share in the company and also receive free gym membership for a friend or family member (employees already have membership themselves).
But we are now having to change our legal status (to become a charity), which means that we will no longer be able to offer a share in the company in future.
We would like to find a way to continue offering gym membership to either friends or as a family membership package though, but are looking for qualifying criteria to put against it. We have asked staff to come up with ideas too.
What is our legal position here? Would a six-month waiting period be enough to avoid any age-related issues and see new staff through their probation period? Any alternative suggestions would also be welcome.
The legal verdict
Esther Smith, a partner at Thomas Eggar
From an age discrimination perspective, you are fine to have service qualification periods for certain benefits such as any subsidised gym membership, so long as the qualification period is less than five years. Therefore, if you were going to have a six-month period of qualification, it should not give any employee cause for complaint.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.
Martin Brewer, partner at Mills & Reeve
As I understand it, the question you seem to be asking is whether imposing a six-month qualifying period for employees’ friends or relatives to be eligible for free gym membership provided by your organisation will face any issues in relation to age discrimination.
On the basis of the information provided, the answer to your question is no.
The benefit to which you refer seems to be in relation to relatives or friends of employees. These individuals are not eligible to bring a claim for age discrimination unless they are within the field of employment, occupation or vocational training of your organisation. Employees cannot bring a claim on behalf of their friends or relatives.
If, in fact, your query relates to the qualifying period for employees to become eligible for benefits, the restriction of six months does not seem in itself to be strictly linked to their length of service with your organisation.
However, if the benefit is linked to length of service, because the period of time required to qualify for it is less than five years, an exemption contained in equality legislation would protect your organisation from any potential claims for age discrimination.
I cannot fathom how imposing a uniform six month waiting period to qualify for this benefit would cause age discrimination issues in any event.
Martin Brewer is a partner at law firm, Mills & Reeve LLP.
