Age and redundancy pay

Published: 19 February 2019

Last updated: 19 February 2019

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What countries does this apply to?

  • England
  • Scotland
  • Wales

Even though they are, on the face of it, indirect discrimination because of age (since younger employees are likely to lose out, as they will find it harder to build up the longer service), you are allowed to make enhanced redundancy payments based on length of service without having to objectively justify this, so long as they are calculated in the same way as statutory redundancy payments.

Examples of enhanced redundancy payments allowed under Equality law:

  • an employer operates a redundancy scheme which provides enhanced redundancy payments based on employees’ actual weekly pay, instead of the (lower) maximum set out in the statutory redundancy scheme
  • using the statutory redundancy scheme formula and the scheme’s maximum weekly wage, another employer calculates every employee’s redundancy entitlement, then applies a multiple of two to the total

If you have your own contractual redundancy scheme that uses age or length of service in a different way, in other words, is not related to the statutory redundancy scheme, this may be unlawful discrimination unless you can objectively justify what you are doing.

If you think this may apply to you, then you need to take further advice.

Page updates

Published:

19 February 2019

Last updated:

19 February 2019

Related information on other websites

Use the statutory redundancy pay calculator on gov.uk

Contact Acas for further information

If you are involved in an employment dispute or are seeking information on employment rights and rules, you can contact the Advisory, Conciliation and Arbitration Service (Acas):

Freephone: 0300 123 1100 (8am to 6pm Monday to Friday)

Text Relay service: 18001 0300 123 1100.

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