Wednesday, July 19, 2006

Redundancy Payments in Local Government - comment now


If you work in local government you need to know about the The Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006 (no, really, you do!)

UNISON branches in local government have until this coming Monday to respond to Head Office over Government consultation on these draft regulations which amend the way in which redundancy payments are calculated. Given how often we face redundancy situations in local government, this is an important topic – not least because employers may use this as an opportunity to make changes to their policies which are not strictly required by law – although all employers will have to review their policies on redundancy payments before the Age Discrimination Regulations come in on 1 October.

The Government has said that in order to comply with the Age Regulations, it intends to replace the current compensatory formula that provides up a maximum payment of 66 weeks’ pay based upon age and length of service, with a discretionary power to award compensation to eligible employees up to a maximum of 2 years’ pay (104 weeks).

Similarly, the Government is removing the power within the Discretionary Compensation Regulations to award compensatory added years to eligible employees over the age of 50, although authorities will still be able to award added years in certain circumstances by using the augmentation provisions under the Local Government Pension Scheme. The maximum number of “added years” will now be 6 2/3rds – and augmentation has to be funded by a one-off up front payment by the employer into the pension fund, rather than paying over a longer period as has been possible.

The consultation document sent out to UNISON branches in June is at http://www.unison.org.uk/acrobat/B2498.pdf.

The consultation letter from the Government is at http://www.xoq83.dial.pipex.com/060508.htm. The draft regulations are at http://www.xoq83.dial.pipex.com/060508regs.htm.

Apologies to any readers who aren’t interested in local government redundancy payments, but this is a significant topic for a lot of UNISON members!

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