A Guide To Age Discrimination In The Workplace

Age discrimination can arise at any stage of employment, from recruitment and promotion decisions to pay, benefits and retirement.

Under the Equality Act 2010, employers are generally prohibited from treating employees or job applicants unfairly because of their age.

However, age discrimination differs from other forms of discrimination because there are certain circumstances where age-related treatment may be lawful if it can be objectively justified.

This guide explains the key exceptions and considerations employers should be aware of.

What is Age Discrimination

Age discrimination occurs when an individual is treated less favourably because of their age or age group.

Examples may include:

• Refusing to recruit someone because they are considered “too old” or “too young”.
• Overlooking an employee for promotion because they are approaching retirement.
• Applying workplace policies that disadvantage employees of a particular age group.

In most cases, such treatment will be unlawful unless an employer can demonstrate a legitimate reason for it.

Service-Related Benefits

Employers are permitted to offer benefits that reward employees for long service.

Examples include:

• Additional annual leave.
• Incremental pay increases.
• Long-service awards.
• Share option schemes.

Where a benefit is linked to more than five years’ service, employers should be able to demonstrate that the arrangement fulfils a business need, such as encouraging employee loyalty, motivation or retention.

National Minimum Wage and Age

Age-based pay differences are permitted where they reflect the statutory National Minimum Wage rates.

Different rates apply depending on the worker’s age and employment status, including:

• National Living Wage.
• Standard adult rate.
• Young worker rates.
• Apprentice rates.

Employers who apply the statutory rates will not generally be acting unlawfully.

Redundancy Pay

Redundancy schemes often take account of an employee’s age and length of service when calculating payments.

This is not usually discriminatory where:

• The scheme mirrors statutory redundancy pay arrangements.
• The scheme aims to reward loyalty and recognise long service.
• The approach can be objectively justified.

Employers should nevertheless ensure that enhanced redundancy schemes are carefully drafted and regularly reviewed.

Insurance and Financial Benefits

Employers may provide certain insurance-based benefits and financial services to employees up to the age of 65.

These benefits may include:

• Life assurance.
• Private medical insurance.
• Income protection policies.

Specific exemptions exist because the cost of providing these benefits often increases significantly with age.

Childcare Assistance

Employers, charities and not-for-profit organisations may provide childcare support to employees with children of particular age groups.

This can include:

• Workplace nurseries or crèches.
• Contributions towards childcare costs.
• Assistance in sourcing childcare providers.

These arrangements are generally permitted under age discrimination legislation.

Retirement and Mandatory Retirement Ages

The default retirement age was abolished in the UK, meaning employers can no longer require employees to retire simply because they have reached a particular age.

Employers may still impose a compulsory retirement age in limited circumstances, but only where they can demonstrate that it:

• Achieves a legitimate business aim.
• Is a proportionate means of achieving that aim.

Without objective justification, a compulsory retirement age is likely to amount to unlawful age discrimination.

How Can Employers Reduce the Risk of Age Discrimination Claims?

Employers can minimise risk by:

• Making recruitment decisions based on skills and experience rather than age.
• Reviewing workplace policies for age-related bias.
• Ensuring promotion and training opportunities are available to all employees.
• Training managers on equality and diversity obligations.
• Seeking legal advice before introducing age-related policies or retirement provisions.

Frequently Asked Questions (FAQs)