Winckworth Sherwood

UK 200 2014 position: 81


Are we still in an age of long-service benefits?

By Jo Keddie with assistance from Danielle Crawford

The culture of long-service benefits is well established in Britain. While the trend has moved away from the time-honoured carriage clock to gift vouchers and celebratory dinners, many employers continue to operate schemes rewarding long service as a way of acknowledging and appreciating employee loyalty, irrespective of the employee’s role or position within the organisation’s hierarchy.

When the Equality Act 2010 was implemented, many employers became concerned about whether the practice of rewarding employees who had achieved long-service milestones would fall foul of the act, principally because such awards could give rise to age discrimination. This is because employers who offer long-service awards will almost certainly indirectly discriminate against younger employees who, simply because of their age (a protected characteristic under the act), are less likely to have accrued long service when compared with their older colleagues.

Fortunately, the act does contain comprehensive provisions in respect of long-service benefits and such benefits will be relatively easy to justify for most employers. However, employers should still proceed with caution, as unless they can rely on an exemption or justify the benefit, there is a real risk they will face claims by employees for age discrimination that, if successful, can result in uncapped damages against the employer…

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