Redundancy aside, we have a variety of service-related benefits. Some of these kick in before five years’ service, while others are only available to longer-serving employees. Some of these benefits have been negotiated with the unions over a long period of time, so where do age laws leave us now?
There is still a lot of confusion around benefits. Any benefit requiring up to five years of service will be lawful and you don’t have to do anything. Benefits that require more than five years’ service will need to be linked into a legitimate aim, such as rewarding loyalty or encouraging motivation. Although you won’t have to provide a full objective justification, you will have to demonstrate that these policies are reasonable and contribute to the business.
If employees are already complaining that different terms are unfair (share options and bonus schemes may be a high-risk area), and if you would find it difficult to demonstrate reasonableness, you may have to re-negotiate agreements. In these cases, consider whether the age laws give you an opportunity to harmonise benefits, or whether a move to a more flexible benefits system might be a good option.
Freda Line is head of employer relations at the Employers Forum on Age.