Long service awards policy

Our long service awards policy enables you to reward your staff for their loyalty and experience. Extra annual leave is always a popular reward amongst employees. However, you will need to show that your business needs justify any service criterion that’s over five years.

Age discrimination

Any pay and benefits which are linked to length of service indirectly discriminate because of age - younger employees are likely to have fewer years’ employment than older staff. However, the Equality Act 2010 contains a specific exemption which allows you to use length of service as a criterion for the provision of a benefit. What the legislation says is that a service criterion of five years or less is lawful. This means you’re entitled to award benefits to employees using the criterion of length of service, provided it’s based upon no more than five years’ service. Where the length of service criterion is more than five years, you’ll have to show you reasonably believe that the way in which you use the criterion of length of service fulfils a business need, for example, by encouraging the loyalty or motivation, or rewarding the experience, of some or all of your staff. You’ll then need evidence to support your reasonable belief. It’s best to carry out some form of staff attitude survey or set up focus groups to discuss your long service award proposals with your employees - what you need is for them to confirm that they think it will encourage their loyalty and/or motivate them and/or reward their experience.

Policy provisions

Our Long Service Awards Policy sets out a number of optional long service awards, including extra annual leave days (which could be ongoing by increasing annual leave entitlement or granted as a one off), a gift voucher/cash gift and a restaurant meal. It’s really up to you what long service awards you want to give and at what service milestones, so do treat our suggestions as a starting point only - but subject to satisfying the business need test for any service milestones that are over five years. Our policy also sets out how you’ll calculate length of service (you need to include time off for maternity leave, paternity leave, etc.) and that you’ll write to the employee when they’re eligible for an award with details of it. Finally, we’ve made our policy non-contractual and given you the discretion to change or withdraw it at any time. In addition, it ensures that an employee doesn’t get an award if they’re working out their notice period on their service anniversary date - after all, where’s the benefit to you of rewarding someone who’s about to leave?