The delay in bringing into force the pensions element of the age discrimination regulations could affect redundancy packages, according to consultants Watson Wyatt.
Although the firm welcomes the delay it warns that it throws up new issues that employers will have do deal with quickly.
The particular issue of concern is redundancy arrangements, which usually involve a combination of pension and non-pension benefits. Both are measured by employees and unions to ensure a fair deal is reached.
But many employers have been working closely with employee representatives over the last few months to develop an acceptable redundancy package that is 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.
Watson Wyatt senior consultant Kathryn Armitstead said: “It is good news that the DWP has decided to delay the implementation given the uncertainty that existed: many employers were struggling to understand what to implement in the relatively short period left to October 1.
“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.
