Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.
The Equality Act 2010 contains an exception allowing employers to provide benefits which reward long service.
If the benefit in question depends on length of service over 5 years, an employer must show that it "reasonably appears" to it that the award of the benefit "fulfils a business need". There is an EHRC Code available, which whilst non-binding, still provides useful guidance on the subject:
You can check paragraph 14.23 on page 195 which specifically states a business need in these circumstances could be Examples of a business need could include "rewarding higher levels of experience, or encouraging loyalty, or increasing or maintaining the motivation of long-serving staff."
If the reasons behind the loyalty bonus can fall within this definition then it is likely that they could be allowed under the Equality Act and as such would not be unlawful or discriminatory.
Do you know where the exception is mentioned?
I expect he would be unlikely to prove the case as it does not (in his eyes) benefit the company - currently it is an added cost (less than 1 person a year currently receives this bonus)
Please let me know if this has answered your query or if you need me to clarify anything else for you in relation to this?
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