THE national minimum wage will be “wide open” to legal challenge when EU rules banning age discrimination come into force next month, lawyers have warned the Government.
They say that the lower rate for workers aged 18 to 21 is discriminatory, and ministers have not done enough to make it exempt from the Brussels directive.
The directive makes discrimination on the ground of age illegal. It is primarily aimed at helping older workers, but will also give more protection to younger workers who are often denied promotions or pay rises because of their age.
Labour introduced the youth rate of £4.35 an hour, compared with the adult minimum wage of £5.05, to improve the job prospects of younger workers. It makes them more attractive to potential employers who might otherwise hire someone more experienced.
The EU directive exempts national policies that help to promote access to employment for certain groups of workers, but a recent judgment from the European Court of Justice against the German Government has cast doubt on whether the exemptions are robust.
The court threw out a German policy that allowed employers to offer people over 50 short-term contracts, saying that the measure was disproportionate to the problem.
The German Government assumed that its policy was exempt from age discrimination laws because it helped to promote the employment chances of older workers.
“The implications are very worrying indeed for the minimum wage and suggest it is wide open to challenge,” said James Davies, head of employment law at the firm Lewis Silkin. “It could be argued that not all 18 to 21-years-olds need to be paid less to get a job. Many in that age group will easily find employment.”
Sam Mercer, the director of the Employers’ Forum on Age, which advises big companies on the new law, said that the judgment was a warning to all governments not to think that their labour market policies would be exempt. “This is a warning bell for the minimum wage,” he said. “The youth rate may well be a sledgehammer to crack a nut. Is it right that all 18 to 21-year-olds can be paid less than the rest of the working population to improve the employment chances of some young people?”
A spokeswoman for the Department for Trade and Industry said that the Government was confident that the youth rate was “objectively justified”.
She said: “It is perfectly legitimate and proper for Britain to have lower rates for young workers if we believe, as we do, that this will help protect youth employment.”
The minimum wage was Labour’s flagship reform to end low pay. It is one of four government policies that could fall foul of the new age discrimination legislation.
Natalie Gowers, 29, a trainee plumber in London (pictured above), earns the full minimum wage because she is 29, but says that her younger colleagues should be paid the same. “I don’t think it’s fair because we are all doing the same work and we should be rewarded the same way.”
Also vulnerable is the statutory redundancy scheme, which gives workers over 40 more generous packages, the modern apprenticeship scheme for those under 26, and the default retirement age of 65.
