An exception in the regulations allows enhanced redundancy payments, but this is applicable only where employers replicate the age multiples used in calculating statutory redundancy pay (which the Government is controversially retaining). Most company schemes don't use the state method, so the employer will have to fall back on the general defence under the regulations of showing that the discriminatory impact is 'justified'. Although tribunals may be sympathetic, this will represent a significant financial exposure for many businesses. And as enhanced severance pay is likely to form part of employees' contractual rights, the alternative option of removing schemes altogether is equally unpalatable.
Michael Burd and James Davies, Lewis Silkin solicitors, e-mail: email@example.com