Good practices to prevent age discrimination claimsThe average life expectancy has steadily been rising over the past several decades. As a result, people are remaining in the workforce longer, making businesses increasingly multi-generational. In fact, there are an estimated 1.19 million employees over the age of 65*. However, as the number of older workers has increased, so has the potential for a business to be served with an age discrimination claim. The average cost of an age discrimination claim from April 2015 to March 2016 was £9,025**.
What can your business do?
To help protect your business, review the following eight good practices for preventing age discrimination claims:
- Examine your business’ practices and provisions. A practice or provision cannot be classed as age discriminatory if it can be “objectively justified”. This means that you need to show clearly that you have a good reason for doing it, and you are pursuing a genuine aim. You also need to show that the way you achieve that aim is fair and balanced.
- Do not rely solely on exemptions to cover every age-related rule. Whilst there are some exemptions for pensions that are legal, and do not constitute age discrimination (known as statutory exemptions), you should check that you are not unintentionally risking discrimination. And, you should also monitor changes in employment laws to make sure that your pension practices remain up to date.
- Audit your pension scheme. Carry out regular reviews of your pension scheme with your advisers, checking for any rules or practices that could be considered as discriminating. If there are, you need to decide whether it falls within a statutory exemption or if you can objectively justify it.
- Carefully review benefit change exercises. If you plan to make a change to any of your benefits, you should review them to ensure none are inadvertently discriminatory. If there are any, you should make sure that you can justify your reasons for choosing that strategy
- Clearly communicate with your staff about pension benefits. All communications to employees about pension benefits should be clear and free of jargon to avoid misunderstandings. Encourage staff to talk openly to you if they have any concerns or questions about their pension benefits.
- Be sure to consider insured benefits. Review insured benefits. Specifically ill health and death benefits. Ensure that any employees using the benefit are kept informed. Employees need to know whether or not they still qualify for those benefits when they are past a certain age.
- Provide workplace education and retirement planning courses. Retirement can be a particularly difficult topic to broach. And, with the Default Retirement Age having been abolished for over 6 years now, there is no “right time” to discuss this with older workers. However, if you put the idea of retirement and saving for retirement in your employee’s minds when they start work, you can encourage open and easy future discussions about it.
- Most people will want to retire at some point. Helping employees to prepare early helps to avoid age discrimination issues and provides your employees with the support they need.
- Consider employment practice liability insurance. Just in case there are any gaps you have missed. This insurance covers wrongful acts that arise as part of the employment process, e.g. wrongful termination, discrimination, sexual harassment etc.
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This article should only be used as a guide. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought before taking any action based on the information in this article.
*ONS October 2016
**Employment Tribunal Awards Statistics 2015-2016
Zywave Commercial Insurance Pro-File February 2017
- employment law