Over 40s will continue to get higher redundancy pay

The government has announced that it will not move to a single multiplier for statutory redundancy payments when the Age Discrimination Regulations are introduced in October.

Today the DTI said that the current statutory redundancy pay scheme, which gives people over the age of 40 higher rates of compensation, will remain in place.

The Employers Forum on Age (EFA) said this sends a mixed message to employers and employees alike.

Sam Mercer, director of the Employers Forum on Age, said: “Is it right that two people, with fifteen years service each, should get different rates of compensation because one is 39 and the other 42? Each arguably would face similar difficulty getting back into work”

“When the government first signalled its intention to remove age based compensation in 2002, employers were ready to redesign their redundancy schemes to remove the inbuilt age bias. An opportunity has been missed.

“Inevitably schemes will now be challenged as ageist over the coming years,” she warned.

The full Age Discrimination Regulations are due to be laid before Parliament next week.