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Now In: Pay and benefits > Basic pay and benefits
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What payment details should be included in a contract of employment?

Should any benefits available to an employee be listed in the contract of employment?

Is it ever permissible for an employer to withhold bonus payments?

How should an employer go about setting up an employee share scheme?

When may an employer withdraw the use of a company car?

Are employee benefits taxable or non-taxable?

Is the company Christmas party a taxable benefit?

If an employer provides an employee's accommodation is it permissible to require the employee to leave the accommodation at the termination of employment?

What are an employer's duties regarding employee expenses?

If an employee abroad on a work-related trip is unable to return to the UK due to travel disruption, is the employer responsible for paying for his or her accommodation and food?

If an employee abroad on a work-related trip is affected by travel disruption, is the employer responsible for the cost of alternative travel arrangements for the employee to return home?

Are long-service awards incompatible with the Employment Equality (Age) Regulations 2006?

Is it still permissible to award greater holiday entitlement to employees who have, for example, 10 years' service?

Where it is a company's policy to give a small gift to employees who have completed periods of service of multiples of 10 years could this be discriminatory under the age discrimination regulations?

Yes, unless the gift falls within the "business need" exception for service-related benefits. Regulation 32 of the Employment Equality (Age) Regulations 2006 (SI 2006/1031) provides an absolute exception from the Regulations for service-related benefits awarded by reference to a length of service criterion of up to five years. It also allows a length of service criterion of more than five years where it "reasonably appears" to the employer that the way in which the criterion is used "fulfils a business need for [its] undertaking", for example by encouraging the loyalty or motivation, or rewarding the experience, of some or all of its workers. These are cited in the Regulations as specific examples of possible business needs. An employer may well be able to show other business needs. The "business need" test is not the same as the standard age discrimination objective justification test, because there is no requirement to show proportionality. The standard of proof necessary for an employer to take advantage of this exception is, therefore, lower.

Many benefits based on length of service arguably seek to reward loyalty or experience. However, the employer will still need evidence from which it can reasonably conclude that there is a benefit to the business. This might include information gathered through monitoring, staff attitude surveys or focus groups. The employer should, therefore, go through a process of actively considering whether the long-service criterion it imposes for receipt of a gift every 10 years does actually fulfil a business need, and should set out in writing its reasoning and conclusions.

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