Employment Equality (Age)Regulations 2006

My Lords, I thank the Minister for explaining the regulations so clearly. We agree that unfair discrimination based on age is clearly unacceptable and the vast majority of employers recognise that the only acceptable basis for discrimination is ability. It is important that people should be encouraged to work until a later age than has been the case hitherto. Making the most of employees and attracting new workers is vital to the competitiveness of United Kingdom firms. Our businesses already well recognise that the challenge of an ageing population means that employment of the over-50s will become ever more important to them and they are addressing this regardless of coercion. Government and businesses have an equal imperative to find ways of increasing participation among this group. Experience tends to show that people in work also remain healthier longer, which is good for the individual and good for the National Health Service. However, it is necessary to strike a balance between, on the one hand, the fact that people should be able to work for as long as they are willing and able and, on the other, that a clear retirement age is important to companies in planning their businesses and ensuring that firms can retire employees with dignity, rather than their being forced to dismiss staff on grounds of competence. The new right for employees to request postponement of retirement will give staff the opportunity to discuss working longer. I hope that the Minister will forgive me if I ask some questions that he may already have answered—the regulations are quite complicated. Will he confirm that the right-to-request procedure will nevertheless allow employers the final say over the retirement date to avoid a huge increase in employment tribunal claims? Can the obligation to discuss be complied with without employers being forced to hold innumerable and repeated discussions with any individual employee who cares to raise the issue? A common-sense approach is necessary. Will the Minister confirm that the new regulations will not be seen by aggrieved employees of whatever age as a carte blanche to take their employer to tribunal? Employers must feel confident that they can defend perfectly justifiable age-related employment practices where they benefit both employer and employee. The Government must recognise that the new law will take time to bed down as employers become used to the new requirements. We note that no transitional arrangements seem to exist in the draft regulations. Does the Minister have any comment on that observation? Just as it is right to ensure that older workers receive higher levels of redundancy pay, companies should be allowed to reward the loyalty of their longer-serving employees with incentives such as more holidays and better sick pay. Other practices, such as health checks for older workers or IT training for over-50s, are also highly valued and should not be scrapped as a result of the regulations. I think that the Minister has assured the House that those practices will not become outlawed by the regulations, but will he confirm that? Will he further assure the House that the regulations will not prevent employers, first, paying a youth rate to inexperienced employees under 21, which might otherwise discourage employers from offering them employment at all; and, secondly, providing length of service related benefits? Concern has also been raised that the regulations will equalise statutory redundancy pay across age groups, where the existing framework recognises that older workers are less likely to be re-employed. Will the Minister assure the House that those fears are groundless? The Minister is also aware that partnerships have two fundamental concerns in relation to the regulations. First, regulation 7 provides a default retirement age for employees at 65. That default is not extended to partnerships and it is therefore necessary for partnerships to provide objective justification for a retirement age at any given age that may be specified and agreed on by the partners. The absence of any guidance as to what a partnership is required to do to provide objective justification for retirement at a given age—particularly bearing in mind that it was observed several times by the Minister in the other place on Monday that such a threshold is going to be ““a stiff test”” to satisfy—is of great concern, as it creates significant business uncertainty as to how this test can be accomplished and demonstrably shown to have been satisfied. Secondly, although it is permitted by regulations 32(l) and 32(2) to attach length of service benefits to benefits that employees and partners may enjoy while they are within employment or continue to be within a partnership, regulation 32(7) does not sanction any length of service benefits which, although arising through length of service, are awarded if they arise by virtue of the employee or partner ceasing to work. In other words, if length of service benefits arise after employment, objective justification still has to be provided. That requirement creates significant business uncertainty to employees and partnerships alike. For example, in the partnership context, it will be unclear whether post-retirement benefits which attach to length of service, commonly available to partners after their departure from a partnership, can be regarded as lawful. It thus emerges that in both these areas of concern it is necessary for partnerships to provide objective justification for arrangements which have nonetheless been agreed on by partners through internal consultation and voting. Partners frequently play a key role, both as proprietors and managers of the business in which they work, and in making the decisions which create their governing rules. We thus contend that such consultation and voting should be given full and proper regard so as to demonstrate objective justification. Accordingly, it would be of great assistance if the Minister could confirm that Her Majesty’s Government recognise the different status of members of partnerships from employees, and in consequence undertake to ensure that guidance is published well before 1 October but after further consultation with those representing professional partnerships to ensure that employment tribunals take account of the very different nature of the partnership relationship and give proper weight to the rules and means by which partnerships determine these arrangements and thus allow partnerships to be able to satisfy themselves that the requisite level of objective justification has been achieved. Without such guidance we believe that partnerships will face a significant degree of uncertainty in their business planning which will both affect their ability to bring in new partners as well as risk undermining their vital contribution to the UK economy. We support an end to age discrimination but the above concerns are important. I look forward to the Minister’s responses.