Redundancy Schemes – A New Solution To An Old Problem?

The Employment Appeal Tribunal has ruled that a redundancy scheme that gave more generous terms to older employees did not amount to age discrimination. Will Walsh from our Employment Team explains.

The case in question was Lockwood v Department of Work and Pensions. When the DWP went through a redundancy exercise in April 2007, Miss Lockwood took advantage of the voluntary redundancy scheme on offer. Her employment terminated in September 2007. Miss Lockwood was 26 years old at the time. Under the scheme, as a 26 year-old employee with 8 years' service, Miss Lockwood received a redundancy payment of £10,849.04. However, under the scheme rules, her severance payment was about 61% of that of a colleague aged over 35 with the same length of service.