Redundancy schemes fall foul of ageism regulations

In response to the Opinion article by Susan Anderson (Personnel Today, 21 March), and certainly going by the mailbag at the Employers Forum on Age (EFA), I am not sure many employers would agree with the CBI’s view that the government’s age regulation redundancy provisions are all good news.

Calculating compensation by age is wrong in principle. The anti-ageism regulations should make it unlawful for employers to treat people differently due to age, yet the statutory redundancy pay (SRP) scheme will continue to favour people over 40. Schemes could therefore be challenged further down the line.

As for how the redundancy provisions will impact employers in practice, the SRP scheme aside, most UK employers operate enhanced redundancy schemes that do not reflect the age bands in the statutory scheme (the government itself operates different age bands). These regulations only provide for redundancy schemes which exactly mirror the SRP scheme. This means employers with different age bands will have to objectively justify their schemes from October onwards.

Providing a full, objective justification will not be an easy task. Employers will not only have to provide a legitimate aim, but will also have to provide statistics to demonstrate the difficulty different age groups have in getting another job. This will no doubt vary both geographically and sector by sector. And the bad news for employers who have removed age bands altogether, is that they will have to objectively justify their schemes too. This creates a major headache for employers just six months before the age regulations come into force.

It is a pity the CBI’s extensive lobbying on redundancy didn’t address any of these issues.

Sam Mercer
Employers Forum on Age

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