NHS launches non-ageist redundancy pay arrangements

New redundancy arrangements have been introduced for NHS employees to comply with the age discrimination laws.

Anyone made redundant from 1 October this year will receive a package that no longer depends on how old they are.

The previous NHS redundancy and early retirement arrangements had a number of age-related thresholds that gave different benefits to people of different ages.

Under the new arrangements, everyone will receive a flat rate of one month’s pay for every year of service, with a maximum of 24 months.

Staff over the minimum pension age will be able to retire early on redundancy, with no reduction in the value of their pension. And workers will also be able to take early retirement without the value of their pension being reduced.

Transitional protection will be provided for existing staff aged over 50, who were entitled to added years on their pension when they were made redundant. This protection will reduce over a five-year period, ending on 30 September 2011.

NHS Employers project manager, Tim Sands, said: “We accept that at the beginning of the transition, redundancy costs are likely to rise. However, we have to consider the new legal requirement, and there is a greater financial risk to trusts if they don’t comply with the requirement. In the long run, on average, trusts that have a redundancy programme with an age profile that reflects the age profile of their workforce should see costs fall by about 20%.”

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