The Wage Incentive is part of the Youth Contract and pays out a tidy £2,275 to employers for every full time staff member they recruit aged between 18 and 24. Unlike most welfare-to-work schemes, employees recruited under the Wage Incentive must be paid at least minimum wage. The document addressing the legality of the programme reveals however that employers who who take up the offer of free money from the DWP may find themselves in the courts.
Concerns are raised about whether this scheme breaches age discrimination laws. The DWP’s answers seems to be little more than “we hope not”.
It would usually be illegal to only make a position available to a younger person unless it is: “a proportionate means of achieving a legitimate aim”. This is similar to other anti-discrimination laws relating to employment which are usually used in social care or the entertainment industry. This means for example that a white actor can’t sue a company for not letting him play Martin Luther King, or that a women’s refuge can legally only recruit female staff.
The DWP are crossing their fingers and claiming that bringing down youth unemployment is a legitimate aim. But they don’t seem that confident as the document reveals:
“It is possible that a legal challenge could be brought against DWP. If this happened, we would strongly argue that the Youth Contract, including the wage incentive scheme, was justified”
They recently strongly argued in court that their workfare schemes were legal. They lost.
But it is employers themselves who might find themselves in the dock. The DWP warn:
“It is also possible that employers could face a legal challenge. If this happened, an employment tribunal would wish to consider the employer’s reasons for participating in the scheme. Each case will turn on its merits.”
It seems that Iain Duncan Smith is only to happy to risk other people’s money by tricking them into schemes of dubious legality. The latest research reveals that the larger companies, who have legal departments, have by and large shunned the scheme. This document, hidden away on the DWP’s website, may be one of the reasons why.
The document is available at: http://www.dwp.gov.uk/docs/wi-more-info.pdf
There’s more to come on this shabby scheme
after the weekend tomorrow, I couldn’t wait.
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