Length of service awards are proving tricky for employers preparing for incoming age discrimination legislation due to take effect in October, warn lawyers. In some cases, employers may be carrying out unnecessary work by reviewing benefits linked to length of service, particularly those which relate to service of five years or less, which are exempt from the legislation.
James Davies, partner and joint head of employment and incentives at law firm Lewis Silkin, said: "Big organisations have asked what they should be doing around long service awards and age laws. Although there are many aspects of perks to be looking at where the new rules are concerned, some areas need less concern.
Length of service is one of these." Even perks linked to more than five years’ service are likely to need little alteration because they can be justified as loyalty awards. "Companies may change their approach as it does not fit with the organisation, but if they are saying ‘we need to change it because the law requires it’, they’re over-reacting," added Davies.
However, retailer TK Maxx plans to review each of its service-related benefits for fear of being caught out by the legislation. Soraya Salem, compensations and benefits manager, explained: "Our policies are not looking too bad, but we will take out anything that involves a five year service, as we have been advised that any benefit linked to length of service will have to go.
For example, it will look at holiday. "Store associates have 23 days holiday on arrival to the company and then after four years this rises to 24 and after five years to 25. We will have to re-think this."