News
New Age Legislation Could Spell End Of Workplace Benefits
29 September 2006
Ahead of the Employment Equality (Age) Regulations coming into effect on Sunday 1st October, leading campaigner on age issues in the workplace, The Employer's Forum on Age (EFA), has voiced concerns that the Regulations will threaten the provision of a wide range of insured employee benefits* currently provided by employers and much valued by employees. These concerns have been submitted to the DTI in a paper prepared jointly with the Association of British Insurers (ABI) and Group Risk Development (GRiD).
Sam Mercer, Director of The Employers Forum on Age comments: "As a direct result of the Age Regulations, employers are being forced to rethink their approach to benefits. Unlike occupational pension schemes, these do not come under the broad range of exemptions built into the Regulations.
"The Age Regulations, as they currently stand, fail to recognise the increased costs employers face in providing insured benefits, the availability of specific benefits to employees over 70 and the risk employers face in seeking to objectively justify the provision of different benefits to employees at different ages (which is current employer practice)."
The EFA fears that the unintended consequences of the Regulations could be:
- Employment opportunities after the default retirement age 65 being severely diminished, if employers are unable reasonably to discriminate against older workers (where insurers are unwilling to provide cover or where the costs of continuing benefit coverage are disproportionately high). This could mean fewer people being given the opportunity to work post 65 after the 1st October when the Age Regulations come into force (directly contradicting one of the main aims of this legislation)**.
- The removal of employee benefits for all employees irrespective of age. In particular, it is likely that employers, in the absence of specific exemptions in the Regulations and on the basis of cautious legal advice, will become increasingly risk averse and will curtail or remove benefit programmes they provide to employees on a group basis.
Mercer continues, "This is principally because employers are not at all convinced that they will be able to objectively justify the age discrimination necessary to continue to offer these benefits, especially where cost is the main reason. This has serious ramifications: if employers fail to provide many of these benefits, then the burden of providing for employees when they are unable to work and fall sick will fall on to the State."
Mercer concludes, "We believe it is critical that the Government urgently consider amending the Age Regulations to add further exceptions in relation to insurance provision, specifically around the fixing of an upper age limit for coverage. This could be directly linked to the default retirement age of 65, and could, if necessary, increase over time."
- End -