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UK: Older staff set for lower redundancy


By David Turner, Financial Times


 June 30, 2003

UK - Older workers who lose their jobs will receive lower redundancy pay than at present under plans drawn up by the government.

Age campaigners have attacked the proposal as another blow for the beleaguered older worker, although the proposal forms part of the forthcoming law on age discrimination.

As the law stands, employees aged 41 and above must receive payment of at least a week and a half pay for every year of service above the age of 41 with their employer. Under the new proposal, that payment would be only one week for each year, which most employees aged under 41 must receive by law if they are made redundant.

The proposal is part of government provisions to put the age discrimination clauses within the 2000 EU employment directive into UK law. The proposals are set to be sent out for consultation this week.

Michelle Mitchell, head of public affairs at Age Concern England, said: "Many over-50s find it impossible to get back into the workplace after losing their jobs and are unable to build up adequate pension contributions."

The employment rate among the over-50s is much lower than for younger workers.

But even though the plans would save millions of pounds for business, David Yeandle, of the Engineering Employers' Federation, was unenthusiastic. "I would have preferred it if they'd left well alone as any change will inevitably cause complications for employers," he said.

Many businesses pay more redundancy money than their statutory obligation, but tend to use the law as a benchmark for setting their payments.

Business organisations have in the past shown little or no interest in such a levelling-down of redundancy terms.  

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