My employer provides an automatic 'loyalty' bonus of an additional three days of paid holiday after five years' service and four days' paid holiday after 10 years' service. Is this lawful?

The age provisions of the Equality Act provide for an exemption for certain benefits based on length of service.. However, where awards are made by reference to a length of service, the employer will need to be able to establish that the basis for the award fulfils a business need, for example, by encouraging the loyalty or motivation, or rewarding the experience of skilled workers.

 

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