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Preventing flu in the workplace

Minor illnesses such as flu are one of the main reasons for short-term sickness among employees in the UK. Around 172 million working days were lost in sick days last year - at a cost of 13.2 billion to the economy - so implementing a flu vaccination programme this winter makes sound commercial sense.

Age Discrimination: Implications for employers and salary related staff benefits Aug 07

The Employment Equality (Age) Regulations came into effect in October 2006 and has implications for Employee Benefits (e.g. Pensions, Death in Service schemes). Some confusion exists and there is concern that the message has not yet fully reached all employers.

The default retirement age for men and women in the UK has been set at age 65.

A later retirement age is possible. An earlier, mandatory age cannot be applied without suitable justification. In addition to banning mandatory retirement ages before 65, employees have the right to request the option to work past 65. Companies must provide 6-months advance notice before the intended retirement date.

The aim of the legislation is that employers should not treat an employee less favourably due to their age, unless such treatment can be objectively justified. Objective justification is defined as a proportionate means of achieving a legitimate business aim. This can be difficult to demonstrate.

Age Discrimination has a significant impact on Group Income Protection (GIP) schemes in particular (also known as Group Permanent Health Insurance - GPHI). Extending the intended retirement age of 60 on a GIP scheme up to 65 may be expensive.

The cost of this adjustment could be as much as 40% (depending on the scheme terms) but costs can be contained by adjusting the scheme benefits and terms e.g. i) extending the Deferred Period – the period before a claim commences or, ii) limiting the Benefit Period - how long a claim is potentially payable for.

Generally there are implications for all employee benefits as it will constitute direct discrimination to exclude someone from a benefit enjoyed by the rest of the workforce based on age. Provision of some benefits for employees over the age of 60 has implications in terms of price and availability. Such factors will need to be considered in the future by companies considering their Employee Benefits package and overall strategy.

It should be noted that cost is not a justifiable reason to exclude a benefit.

As an employee gets older, most benefits become more expensive to provide. The Employers Forum on Age is concerned that companies will reduce benefits rather than attempt to supply them to all employees. Initial feedback from providers indicates that most companies are absorbing the additional costs without trimming benefits.

Smaller companies working within tight margins, perhaps without a dedicated HR resource, may plead ignorance of the rules but beware - there is no period of grace and fines can be levied.

The regulations were not finalised until April 2007 and a lack of clarity remains. The issue of what constitutes “objective justification” for discrimination purposes will depend on the results of case decisions which will take place in the future if the boundaries are tested in court.

Finally, there is a judicial review of the new regulations with the High Court. This seeks to challenge the right of an employer to enforce retirement on employees at the age of 65 under the European Framework Directive on discrimination. This is likely to be referred to the European Court of Justice for a ruling, so, watch this space. If successful there could be dramatic implications for employers. With more people likely to be working past 65 cover will be required more frequently.

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