Warning against ‘levelling down’ of redundancy pay
The government must ensure new age discrimination legislation does not put older workers in a worse position than they were before, trade unions warn today.
New EU rules to outlaw age discrimination will come into force next year, and will make it illegal to continue giving older people higher redundancy payments than younger staff.
Under current rules, employees receive one week’s redundancy pay for every year worked up until the age of 41, after which they receive one and a half week’s pay.
In a submission to the government’s consultation on the issue, the TUC today welcomes the move to end age discrimination but warns it must not be an excuse to cut all redundancy payouts to the same low level.
It is urging the government to protect the rights of older workers by bringing rates for younger employees up to the higher redundancy rate.
“European rules to outlaw age discrimination are welcome,” said TUC general secretary Brendan Barber.
“Unions have campaigned for this for years. Older workers know just how difficult it can be to find jobs, even when they combine years of experience with up to date skills.
“But it would be a real shame to spoil this advance, by levelling down statutory redundancy payments so that workers of all ages get the same lower rate. It sends the wrong signal to employers who may feel free to cut other benefits to their older staff in the same way.”
Mr Barber added that redundancy pay has been falling since it was introduced 40 years ago, when payouts were 12 times more generous.
He revealed that an employee can currently expect to receive a maximum of £8,500 statutory redundancy after 20 years of service, with younger workers receiving even less, and called on ministers to use the forthcoming EU legislation to redress the balance.
