Small firms warned of EU age discrimination law

Small businesses will have problems by failing to prepare for, fundamental changes to employment practices resulting from the new age discrimination regulations due to come into force in 2006.

Small businesses are 'sleep walking' into a legal 'minefield' by failing to wake up to, and prepare for, fundamental changes to employment practices resulting from the new age discrimination regulations due to come into force later this year - that is the warning from business pressure group the Forum of Private Business (FPB) and its employment law partner, leading law firm Mace and Jones.

The FPB, which represents 25,000 small to medium sized firms in the UK, said now the final regulations have been published businesses need to start preparing themselves for the changes immediately.

A recent study of 400 firms by insurance firm AXA has revealed that 40% of small businesses are unaware of the forthcoming age discrimination legislation.

AXA reports that, of those who are aware of it, nearly half - 44% - have so far failed to prepare themselves.

Moreover, research carried out for the UK's Department of Work and Pensions found that, whilst almost half of the 2000 businesses surveyed monitored their workforce recruitment and pay in respect of age, only 5% had taken any action as a result.

FPB employment law adviser Justin Beevor, a partner at Mace and Jones, said that ignorance of the new laws could have costly and time-consuming consequences.

"Small firms balancing tight budgets simply cannot afford to sleepwalk into such fundamental changes to employment law," he said.

"For example, one key change is that a person over retirement age will be permitted to take a case of unfair dismissal to an employment tribunal - which they can not do under the current rules.

If the reason for dismissal is retirement the employer must follow a complicated procedure of notification and meetings, within a set timescale, otherwise the dismissal could become automatically unfair." FPB's chief executive Nick Goulding, urged firms to review their working practices 'as a matter of priority' with just six months to go until new regulations come into effect in October.

"Small businesses need to take time to audit their employment policies and review pension schemes, retirement policies and healthcare arrangements as part of their overall planning and strategy, so they are prepared well ahead of the legal change," he said.

The FPB represents 25,000 small to medium sized firms employing 600,000 people in the UK.

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