Redundancies Affected By Pensions Age Discrimination Delay

Redundancy packages may have to be re-visited as a result of the postponement of the age discrimination regulations for pensions, according to consultants Watson Wyatt.

Watson Wyatt has welcomed the postponement of the age discrimination regulations for pensions. "Faced with the alternative of implementation in a few weeks time this is undoubtedly the right move," said Kathryn Armitstead, a senior consultant at Watson Wyatt. "Many employers were struggling to understand what to implement in the relatively short period left to October 1".

However, Watson Wyatt has concerns that the postponement of the pensions aspects, while continuing to implement the rest on the original date, will throw up some new problems that employers may need to address with urgency.

In particular, redundancy arrangements usually involve a combination of pension and non-pension benefits and it is the combination of the two that employees (and their unions) measure to ensure that they are receiving a fair deal on redundancy. Many employers have been working closely with employee representatives over the last few months to develop an overall redundancy package that is acceptable as well as being compliant with the anticipated regulations. The deferral of part of the regulations, and uncertainty as to their final form, means that the terms offered over the next couple of months will need to be revisited very rapidly.

"It is good news that the DWP has decided to delay the implementation given the uncertainty that existed," said Kathryn Armitstead. "But companies in the midst of making employees redundant are faced with a temporary but immediate problem. They - and employees choosing whether to take voluntary redundancy - may need to do a complete re-think."

According to Watson Wyatt, how much this affects companies planning redundancies over the next couple of months depends on their particular circumstances. In some cases there could be flexibility to delay the redundancies until December, thus avoiding a "stop-gap" solution in the meantime.