Don't level down redundancy payments under new age law says TUC

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date: 10 November 2005

embargo: 00.01hrs Friday 11 November 2005

New rules against age discrimination are welcome, but the TUC is today (Friday) warning that older workers could face reduced statutory redundancy payments if the Government decides to reduce awards to the levels currently paid to younger workers.

At present employees aged 41 and above who lose their jobs get higher statutory redundancy payouts than younger workers with the same length of service. From October 2006, this will not be permissible under the new age discrimination regulations.

The TUC is worried that the Government will simply reduce rates for older workers to the level paid out to younger workers. A fairer solution would be to bring younger employees up to the higher redundancy rate, says the TUC submission to the Government's consultation on the age discrimination regulations.

TUC General Secretary Brendan Barber said: 'European rules to outlaw age discrimination are welcome. 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.

'Redundancy pay is hardly generous, and has fallen markedly. When it was first introduced 40 years ago, a worker could expect a payout that was 12 times more generous. Today an employee with 20 years' service can only expect to get a maximum of £8,500 statutory redundancy, with younger workers receiving even less. The Government should use the coming change in the law as an opportunity to boost the current low level of redundancy payments, not seek to cut them further still.'

NOTES TO EDITORS:

Current redundancy pay is calculated as follows:

- half a week's pay for each year of employment between ages 18 to 21

- one week's pay for each year of employment between ages 22 to 40

- one and a half week's pay for each year of employment between ages 41 or over but under 65.

- if the date of termination of employment (or the date when your notice period expires) falls between your 64th and 65th birthday, payment is reduced by one twelfth for each month of completed service over 64

- there is a statutory maximum limit to a week's pay. This is set annually and is currently £280 per week. A week's pay is the amount payable for normal working under the contract of employment in force at the time of calculation.

There is more information about redundancy at the TUC's world of work website www.workSMART.org.uk

- The TUC's submission on the age discrimination regulations is at http://www.tuc.org.uk/extras/TUCdraftregsresponse.doc

- All TUC press releases can be found at www.tuc.org.uk

- Register for the TUC's press extranet : a service exclusive to journalists wanting to access pre?embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

- A series of TUC rights leaflets are available on our website and from the know your rights line 0870 600 4 882. Lines are open every day from 9am-9pm. Calls are charged at the national rate.

Contacts:

Media enquiries: Ben Hurley T: 020 7467 1248; M: 07881 622416 ; E: bhurley@tuc.org.uk
Liz Chinchen T: 020 7467 1248; M: 07778 158175; E: media@tuc.org.uk

Skills for Life and media enquiries: Dan Ashley T: 020 7467 1248; M: 07880 504846;
E: dashley@tuc.org.uk

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