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Last Updated: Friday, 29 September 2006, 12:14 GMT 13:14 UK
Age law 'threat to minimum wage'
By Julian Knight
Personal finance reporter, BBC News

Young people
Young people get a lower minimum wage than the over-21s

Age discrimination laws, which come into force on Sunday, could endanger the minimum wage system, a business group has warned.

Workers aged over 21 currently receive more than their younger colleagues.

The British Chambers of Commerce (BCC) said this may be considered discriminatory and be open to legal challenge under the new legislation.

But the government said the different rates were allowed by the law to protect younger workers.

It was one of the areas where discrimination had been ruled to be "objectively justified", a Department of Trade and Industry spokeswoman said.

"Our concern is that if we did not protect the development bands in this way, some employers may lay off younger workers."

The government's own minimum wage law discriminates against people on the grounds of age. They are in a pickle
Olly Scott, BCC spokesman

The legislation has been introduced following an EU directive from Brussels which makes discrimination on the ground of age illegal.


On the same day as the age legislation comes in, the minimum wage for people over 21 will rise by 30p to 5.35 an hour.

The rate for workers aged 18-21 will rise by 20p to 4.45 an hour, while workers aged 16 to 17 will get a 30p rise to 3.30 an hour.

"The government's own minimum wage law discriminates against people on the grounds of age," Olly Scott, BCC spokesman told BBC News.

"They are in a pickle. If this were the subject of a legal challenge, based on the new age law, the government may put the minimum wage rates of the those aged 21 and under, up to the same level as the over-21s."

This is an intelligent piece of legislation ensuring employers look at employee skills
Kevin Kelly, Leeds

On Thursday, the High Court agreed to hear a case brought by charity Heyday, which argues that forcing people to leave work just because of their age contravenes European employment law.

If successful, the case could lead to other areas of law being challenged, say analysts.

Hilary Metcalf, of the National Institute of Economic and Social Research said: "Youth pay rates are discriminatory - we will have to wait to see whether they are illegal under EU law."

It would be bad for the country if we didn't try and change the culture
Alastair Darling
Trade and Industry Secretary

And the Third Age Employment Network, a charity dedicated to improving the employment prospects of older workers said a legal challenge to minimum wage rules could be on the cards.

"I am sure it (minimum wage law) could be challenged," its chief executive Patrick Grattan, told BBC News.

"It could be considered unfair to pay someone a different wage based on their age, rather than someone being more competent."
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But he added that the government may have a viable defence against any legal challenge - by arguing that different minimum wage rates were in place to encourage more younger people to stay on in education rather than find a job.


The banning of age discrimination from 1 October has been described as the biggest shake-up of workplace laws for 30 years.

It will be unlawful to discriminate against workers on the grounds of age.

Making someone redundant or barring workers from promotion because they are too old - or too young - will be against the law.

As they approach 65, workers will have to be given six months' notice that their employer wants them to give up their job and retire.

However on Friday, a survey claimed that firms are confused by the laws, with two out of five saying they fear breaching them.

The study of 150 organisations, employing about half a million workers, found that many were keeping practices which could foul of the regulations.

While not illegal, firms asking for a candidate's date of birth on application forms was not "in line with the spirit of the legislation and opens employers up to be challenged," said Audrey Williams, spokeswoman for law firm Eversheds, which carried out the survey.

The situation was "worrying", she added.

Trade and Industry Secretary Alastair Darling said it would take time before employers and workers became fully aware of the new legislation.

"It's similar to when legislation against race or sex discrimination was introduced - people gradually become aware of it," he told BBC One's Breakfast.

"In just fifteen years time, nearly one in three of every worker will be over the age of fifty.

"It's quite wrong to discriminate against an individual as a matter of principle on the grounds of age, but it'd also be bad for the country if we didn't try and change the culture."

A guide to how the law should be applied

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