What practical steps should be taken?
To support a decision to continue with long service awards, you may also wish to consider the following popular measures to assess how your organisation can benefit from such schemes:
- Survey staff views
- HR benchmarking figures
- Reduction in turnover
- Exit interviews
- Trade union and staff association
- Special review groups
- Survey line managers’ views
- Business benchmarking data
We would also argue that modern, multi-level schemes are now largely unrelated to the age of the recipient. Consider the introduction of other benefits which apply to all employees, irrespective of age. Basically, a properly structured scheme, we believe, will not offend the proposed legislation.
It is important that you record your decision making process. If challenged, employers will be required to produce supporting evidence to demonstrate that they have considered the effect of their employment policies. Mere assertions will not be sufficient to defend a claim for age discrimination at the Tribunal, and the outcome could be an unlimited compensatory award.
Summary
On the face of it, basing benefits on length of service could amount to direct age discrimination because old age groups are more likely to have completed the required length of service than younger ones.
However, it should be relatively easy for employers to demonstrate that they come within one of the specified exemptions – namely the aim of the service related benefit is to reflect the experience of the employee, to reward loyalty and to increase and maintain motivation.
Furthermore, it is reasonable to conclude that the employer’s business will benefit from pursuing this aim.
It is well recognised that there is a significant skills shortage in the job market. New research conducted by Right Coutts revealed that 41% of senior HR professionals cite the retention of key staff as their organisation’s most critical HR issue this year (2006).
Any steps an employer can therefore take to encourage staff retention and a stable workforce, in which an investment made in training and staff is maintained, must have a real value to the business.
More details are available at: www.dti.gov.uk and Cottrills
Related items:
