Are employers that make salary and job decisions based upon length of service guilty of age discrimination? Martin Brewer, partner and employment law specialist at Mills & Reeve, and Esther Smith, partner at law firm Thomas Eggar, explain.
- (1) The organisation I work for frequently uses the prefix ‘senior’ or ‘junior’ in job titles.
- (2) Employees are paid according to a scale point within a grade and progression from one scale point to the next is based on an annual increment rather than related to performance.
- (3) Annual leave entitlements increase after 5 years service and again after 10 years service.
Could an employee have grounds for an Indirect Age Discrimination claim based on any of the above?
Esther Smith, partner, Thomas Eggar
The legislation preventing less favourable treatment on the grounds of age only came into force in the UK on 1 October 2006, so at this time it is somewhat difficult to give detailed or definitive guidance on how the provisions will operate in practice, as there has not yet been any case law. However, in response to your three specific questions Stephen, I would comment as follows:
In addition, employers should be cautious when advertising for roles with titles such as this and take extra steps to ensure that the job title does not mislead potential candidates into thinking that the job title reflects the age of the person they are looking for. Detailed job descriptions should assist in identifying the nature and breadth of skills that the employer is looking to find in a candidate, rather than how long they have been performing these skills, or indeed how old they are.
Even without the age discrimination legislation, such a time related pay structure is not good commercial practice and can act as a huge disincentive to high performing employees who have not been with the organisation long, as they see their peers getting paid more for putting in less effort. I would strongly advise the employer in this situation to reconsider their pay structure and look at implementing a scheme that rewards performance or skills rather than ‘time served’.
Therefore the provision entitling holiday to be increased at five years’ service is ok. However, the provision entitling holiday to be increased after ten years’ service is discriminatory and will only be lawful if the employer can justify it. For example, by demonstrating that the increased holiday entitlement rewards loyalty and assists employee retention, which in practice will be very hard to show!
Esther Smith is a partner in Thomas Eggar’s Employment Law Unit. For further information please visit Thomas Eggar
Esther can be contacted at: [email protected]
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Martin Brewer, partner and employment law specialist, Mills & Reeve
Stephen, let me deal with each of these in turn:
Martin can be contacted at: [email protected]
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