EQUALITY Age discrimination shake-up could see preferential redundancy deals phased out

Published: 01/12/2005 Volume 115 No. 5984 Page 7

NHS staff aged 41 and over look set to lose their rights to preferential redundancy deals when their terms are reviewed in the light of age discrimination legislation.

NHS Employers announced last week that NHS redundancy terms will be reviewed to ensure they are compatible with European laws.

These make it illegal to discriminate on the grounds of age from next October. Early retirement deals for the over-50s could be abolished, as could current arrangements which give better redundancy packages for those aged 41 and over.

Union Managers in Partnership said it would fight to ensure that future packages would still allow employers to take account of the depth of experience gained over a greater length of service. The union is also seeking legal advice on how existing 'terms and conditions may be preserved' under the new law, under exemptions that are 'objectively justified' - such as organisations' staff retention strategies.

Announcing the review, NHS Employers, which is carrying out the work on behalf of the Department of Health and the Welsh National Assembly, said it would assess 'whether it remains appropriate to have significantly better arrangements for those staff who are of an age where they qualify for early retirement, compared with those that do not'.

NHS Employers has tasked its pensions review team, led by project manager Tim Sands, to take on the review negotiations with unions through the NHS Staff Council.

Mr Sands told HSJ: 'The NHS arrangements have a series of cliff edges where different benefits are incurred depending on your age - at 21, 41, 49 and 50 or over - which would be deemed as age discrimination under the new law.' Under existing arrangements, redundancy terms improve dramatically at the age of 41, but the most generous deals are early early-retirement packages for the over-50s.

MiP chief executive Jon Restell said the union would want to ensure 'all options are explored'.

'Redundancy packages based on length of service are an established process that most people support and understand.' The union also wants to ensure all managers who are set to lose their jobs in the forthcoming NHS restructuring are treated equitably, given that the age discrimination laws will impact in October, midway through the reconfiguration.

The majority of new primary care trusts, strategic health authorities and ambulance trusts are expected to go live next July when chief executive appointments will be made. But appointments at director level are likely to follow in the autumn, with non-board jobs coming later.

'We would not want a situation where staff are being made redundant in the same reorganisation and getting vastly different deals based on whether they leave before or after October, ' Mr Restell said.

He added that there were fears that the review would be used to reduce the£320m estimated redundancy costs associated with the reconfiguration.

Unison senior national officer Mike Jackson said that until the union saw the draft legislation it was taking a 'cautious view' about whether there was a case for differing benefits dependent on age or length of service.

The current NHS redundancy deal

Under current NHS terms, redundancy arrangements improve as staff get older.

Staff aged 18 to 21 get half a week's salary for every year worked, rising to a week's salary for staff aged 22 to 40.

Staff aged over 41 get two weeks' salary for every year worked before the age of 41 - and four for every year after, to a maximum of 66 weeks' pay.

NHS staff aged 50 or over get a package that makes their pension up to what it would have been if they had worked until 65 (with a maximum of 40 years' service allowed) plus immediate payment of their pension.

NHS Employers say this package could be worth six times as much as annual salary.