Don't reduce redundancy pay for older workers, TUC warns

The TUC has raised fears that new legislation to outlaw age discrimination will be used to reduce the level of statutory redundancy payments for older workers.

At present, employees who are made redundant receive a statutory minimum payment of:

* half a week's pay for each year of service between the ages of 18 to 21;

* one week's pay per year from 22 to 40; and

* one-and-a-half week's pay per year from 41 to 65.

The TUC accepts the government's assertion that redundancy payments will have to be "age-neutral" once the Employment Equality (Age) Regulations 2006 come into force - expected to be next October - but wants to see payments for younger employees raised rather than those for older workers lowered.

The government's consultation on the draft version of the regulations leaves this issue open - a move described as "disappointing" in the TUC's response to the consultation. Previously, it noted, the government had told the Age Advisory Group - consisting of experts from the TUC, employers' organisations and other bodies - that redundancy pay would be calculated on the basis of one-and-a-half week's pay per year of service.

TUC general secretary Brendan Barber commented that "levelling down" redundancy payments would spoil the advances that the new regulations will bring, and might encourage employers to cut other benefits to their older staff.

"Redundancy pay is hardly generous, and has fallen markedly," he said. "When it was first introduced 40 years ago, a worker could expect a payout that was 12 times more generous. The government should use the coming change in the law to boost redundancy payments, not cut them further still."