Removing age discrimination from pay systems

The TUC and CIPD say that policies and practices relating to pay and benefit systems should be reviewed in order to identify potentially unlawful practices, train managers in understanding the importance of equality in pay and reward, and monitor practices.

Levelling down pay and conditions (awarding all employees the minimum) may seem the cheapest way to remove discrimination, but such an approach could lead to tribunal claims from affected employees. Instead, they recommend the following ways of removing age discrimination without breaching other employment law:

• levelling up pay and conditions;

• agreeing a change from age- to competency-related remuneration systems (for example, the NHS Agenda for Change model: www.nhsemployers.org/payandcontracts/agendaforchange/pages/afc-ataglancerp.aspx);

• buying out age-discriminatory pay and benefits; or

• compensating lost pay and benefits with other improvements.

They also advise that: “Red-circling (continuing to pay existing staff according to the discriminatory pay system, but freezing the higher-paid employees until the others have caught up) may also be possible, but care needs to be taken with this approach — the red-circling would have to be shown to be a proportionate means of achieving the legitimate aim of a smooth transition to a new pay system.”