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Article date: 1 March 2007
Under the Employment Equality (Age) Regulations 2006 (“the Regulations”) it is unlawful to select for redundancy on the basis of age.
However age bands for determining levels of redundancy pay remain.
Redundancy Selection
Employers will have to be very careful in their selection process for redundancy.
Using LIFO (last in, first out) can have an indirect age discriminatory effect (for example it may penalise younger employees because they are the most recent arrivals).
If employers wished to use LIFO, they would have to justify that such practice is a proportionate means of achieving a legitimate aim.
Redundancy Pay
- Age and length of service continue to be applied to redundancy pay calculations;
- The 20-year ceiling on the number of years to be taken into account in the calculation remains unchanged;
- The former upper and lower age limits of age 65 and age 18 for calculating the period in work have been removed;
- There is no change in the existing age bands for the multiplier used in the calculations for statutory redundancy pay. Employees aged under 21 receive half a week’s pay for each year of service, those aged 21-40 receive one weeks pay, and those aged over 41 receive one and a half weeks pay for each year of service;
- An employer can use a different method of their own to calculate the amount of redundancy payment, but if such method is based on length of service and if an employee brings a discrimination claim under the Regulations, the employer has to objectively justify it in so far as age arises.
For more information please contact Jacqueline Webb (Head of Employment) on:
T: 0845 2637508
E: jacqueline.webb@pictons.co.uk
Every care is taken in the preparation of this article. However, no responsibility can be accepted to any person who acts on the basis of information contained in it. You are recommended to obtain specific advice in respect of individual cases.
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