The National Health Service (NHS) has changed its redundancy package structure as a direct result of the new age discrimination regulations.
Previously, the NHS redundancy and early retirement arrangements had a number of age-related thresholds that gave different benefits to people depending on their age.
Following wide consultation, the new arrangements have been drawn up and agreed between NHS Employers and NHS trade unions and endorsed by the Department of Health, Scottish Executive and Welsh Assembly.
The new arrangements will mean:
- Everyone will receive a flat rate of one month’s pay per year of service with a maximum of 24 months
- Staff over the minimum pension age will able to retire early on redundancy with no reduction in the value of their pension
- Staff will be able to take early retirement in the interests of the service without the value of their pension reducing.
Transitional protection will be provided for existing staff over 50 who were entitled to added years on their pension when they are made redundant. This protection will reduce over a five-year period ending on 30 September 2011.
NHS employers project manager Tim Sands said: “The new arrangements will be fairer for everyone and will help ensure NHS trusts comply with the new age discrimination legislation.
“Employers responding to the consultation generally supported the new arrangements although some said they were worried about short-term transitional costs.
“We accept that at the beginning of the transition, redundancy costs are likely to rise. However, we have to consider the new legal requirement and there is a greater financial risk to trusts if they don’t comply with this requirement.
“In the longer run, once the transitional arrangements are over, on average trusts who have a redundancy programme with an age profile that reflects the age profile of their workforce should see costs fall by around 20 per cent.”
Mike Jackson, senior national officer (health) at public sector trade union Unison, said: “We are pleased to have reached a deal that eliminates age discrimination and compensates staff fairly if they are made redundant.
“We believe the one month’s pay for each year of employment should cause employers to look to alternatives to redundancy in future.”