Contrary to the Government's previous position, it has now been announced that it will not use a single multiplier for statutory redundancy pay (1 week's pay for employees of all ages) when the Age Discrimination Regulations come into effect in October this year. The Government intends that the existing variable multiplier based on age, which uses three age bands, and which offers the greatest financial support to older workers or those with long service, will be retained on the basis that it reflects a legitimate employment policy.
The Government was concerned that a system with a single multiplier may not meet overall policy aims. It was felt that it may leave a significant group of older workers substantially worse off than at present, given that older workers are much more likely to become long-term unemployed. The Government has also decided to remove the lower and upper age limits, of 18 and 65, and the taper at the age of 64 as it feels these cannot be justified under the EU Employment Directive.