Informing Employers of Voluntary Demotion

							                                                  morrison   &   foerster llp




figUre 1: UK Vs. Us anTi-age DiscriminaTion LegisLaTion

The LegisLaTion                                                      UK         Us
The Employment Equality (Age) Regulations 2006 (“UK Age                         The Age Discrimination in Employment Act 1967 (“ADEA”).
Regulations”).
DefiniTions anD scope                                                UK         Us
The UK Age Regulations apply to all employers regardless of the                 ADEA applies to all employers who have more than 20
number of persons employed. They also apply to employment                       employees for each working day in each of 20 or more calendar
agencies, providers of vocational training, trade unions,                       weeks in the current or preceding calendar year. It also applies to
professional associations, and employers’ organizations.                        employment agencies and labor organizations.
The UK Age Regulations do not just apply to employees; they                     ADEA applies to employees and job applicants only. ADEA does
also apply to job applicants, self-employed people, contract                    not apply to self-employed people or independent contractors.
workers, and office holders.
age LimiT?                                                           UK         Us
There is no age limit. The UK Age Regulations protect all persons               ADEA applies to any discrimination against people 40 years
of any age against discrimination based upon their actual age or                of age or older in favor of people younger than 40. Any
perceived age.                                                                  discrimination against a person aged 40 or older in favor of a
                                                                                younger person, who is also over 40, is also prohibited.
sUppLemenTaL LegisLaTion                                             UK         Us
There is no supplemental legislation to the UK Age Regulations.                 ADEA is federal law. ADEA is supplemented by state or local age
                                                                                discrimination law. Therefore, an employer must also comply with
                                                                                local legislation. For example, in California, the Fair Employment
                                                                                and Housing Act, Cal. Gov’t Code §12941, prohibits age
                                                                                discrimination by employers who regularly employ five or more
                                                                                persons, and age-related harassment covers employers who
                                                                                regularly employ one or more persons.
WhaT Does The LegisLaTion impacT?                                    UK         Us
Recruitment and Selection                                                       Recruitment and Selection
Terms and Conditions of Employment (e.g., pay and benefits)                     Terms and Conditions of Employment (e.g., pay and benefits)
Promotion/Demotion                                                              Promotion/Demotion
Training and Development                                                        Training and Development
Termination                                                                     Termination
Retirement                                                                      Retirement
Retention and Redundancy                                                        Retention and Reductions in Force
WhaT consTiTUTes a DiscriminaTory acT?                               UK         Us
VicTimizaTion                                                                   reTaLiaTion
Direct discrimination claims, where one person is treated less                  Disparate treatment claims, where an employer treats employees
favourably than another is, has been or would be treated in a                   aged 40 or over less favorably than younger employees because
comparable situation, on the grounds of age. (Similar to disparate              of the older persons’ age. An employee must demonstrate “intent”
treatment claims in the US.)                                                    in the sense that the actions were taken to affect the employee
                                                                                adversely.
Indirect discrimination claims, where an apparent neutral                       Disparate impact claims, where employment practices appear at
provision, criterion, or practice puts a person of a certain age                face-value to be neutral but when applied actually disadvantage
group at a particular disadvantage compared with a person of a                  one group more than another and where the practice cannot be
different age group, unless it can be objectively justified. (Similar           justified by business necessity or some reasonable factor other
to disparate impact claims in the US.) Intent is not a factor.                  than age. Intent is not a factor.
Harassment, where unwanted conduct related to age takes place                   Harassment is not a separate cause of action under ADEA and
with the purpose or effect of violating the dignity of a person or              would generally fall within the concept of disparate treatment
of creating an intimidating, hostile, degrading, humiliating, or                claims. California, however, does prohibit age-related harassment
offensive environment.                                                          in its Fair Employment and Housing Act (Cal. Gov’t Code §
                                                                                12941).
insTrUcTions To DiscriminaTe                                                    insTrUcTions To DiscriminaTe
Post-termination discrimination, i.e., failing to give a reference or           Post-termination discrimination, i.e., giving an unjustified negative
offer out-placement services on the basis of age.                               job reference, refusing to provide a job reference, and informing
                                                                                an individual’s prospective employer about the individual’s
                                                                                protected activity.




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                                                   employment law commentary




empLoyer Defenses                                                  UK        Us
Justification defense for direct or indirect discrimination if               Justification is the overarching principle behind the four potential
employer can show that the treatment or practice was a                       defenses listed below.
proportionate means of achieving a legitimate aim.
Genuine occupational requirement for job.                                    Where age is a bona fide occupational qualification (“BFOQ”)
                                                                             reasonably necessary to the operation of the business.
An applicant is older than or within six months of employer’s                Where the action is based on reasonable factors other than age.
normal retirement age.
Benefits awarded based upon a length-of-service requirement of               Where the action is in observance of a bona fide employee
five years or less are exempt. Otherwise, length of service can              benefit plan.
be used if it “reasonably appears” to “fulfill a business need,” i.e.,
encouraging loyalty or motivation or rewarding experience. Other
legitimate aims include: health, welfare, and safety; facilitation
of employment planning; particular training requirements; and
recruiting or retaining older people.
Other exemptions are: statutory authority; national security;                Where the employer has good cause to discipline or discharge
positive action; retirement (see below); national minimum wage;              the employee.
enhanced redundancy payments; and life assurance coverage for
retired workers.
reTiremenT                                                         UK        Us
Compulsory retirement based upon age permissible.                            Compulsory retirement based on age prohibited. Employer can
                                                                             have a voluntary early retirement incentive plan if justified.
There is a default retirement age of 65. Employers are only                  Statutory exceptions if the employee is: at least 65 years of age;
able to have a normal retirement age below 65 if it can be                   employed in a bona fide executive or high policy-making position
objectively justified. Retirement may be a potentially fair reason           for at least a two-year period, immediately before retirement; and
for dismissal, provided the employer follows a set procedure.                entitled to an immediate non-forfeitable annual benefit package of
Employees have the right to request to work past the employer’s              at least $44,000.
normal retirement age.

enforcemenT BoDy                                                   UK        Us
Employment Tribunal. A claim must generally be brought within                Equal Employment Opportunity Commission (“EEOC”). A claim
three months of the alleged act of discrimination.                           must generally be brought within 180 days of the alleged violation
                                                                             or 300 days if under state law or 30 days of termination.
Certain claims brought by Commission for Equality and Human                  After bringing EEOC claim, employee can then take civil action.
Rights such as discriminatory advertisements.

maximUm compensaTion for sUccessfUL cLaims                         UK        Us
Unlimited. Employers can be vicariously liable for the acts of their         Damages beyond actual damages are limited to liquidated
employees and workers. Individuals can be personally liable.                 damages. Employers can be vicariously liable for the acts of their
                                                                             employees and workers. Individuals can be personally liable.
aBiLiTy To WaiVe righTs?                                           UK        Us
Yes, provided waiver is in writing, relates to the particular                Yes, provided waiver is in writing, is understandable, and
proceedings, identifies the adviser, and states that the conditions          specifically refers to ADEA rights/claims.
regulating compromise agreements are satisfied.
In limited circumstances, it is possible to waive rights/claims that         It is not possible to waive rights/claims that may arise in the
may arise in the future.                                                     future.
There is no requirement for there to be valuable consideration.              The waiver must be in exchange for valuable consideration.
The person must have received independent legal advice as to                 The waiver should advise the person to consult an attorney
the terms and effect of the waiver, and the adviser must have a              before signing.
contract of insurance or indemnity in place covering the risk of
claim by the person.
There is no prescribed period for consideration, and there is no             The waiver must provide for a consideration period of at least 21
ability to revoke.                                                           days and a 7-day revocation period.




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