Voluntary Redundancy: Selection criteria: Age & Cost implications

hoops120

I work for a Local Authority which, like many others, is looking to make a significant number of redundancies (estimated up to a quarter of the workforce).
I have recently received a letter asking if I want to express an interest in Voluntary Redundancy. To be honest, I can’t see any disadvantages in my own circumstances: I have worked for them for almost 40 years (half time for the last couple of years) and am over 55 years of age. Hence I would qualify for the maximum redundancy package, and be entitled to immediate payment of my pension (unreduced I think).
I have looked at the redundancy selection criteria and one of these is “cost of redundancy”. I may be reading this incorrectly, but it suggests to me that, if there were two potential candidates for redundancy who scored equally on all other criteria except cost, it would be the employee with the “lower cost” who would be granted voluntary redundancy. I fully understand the need for all organisations to minimise cost across the board. I also appreciate that I am in a very fortunate position, ie being able to view redundancy as a positive option, unlike many on this board.
However I am wondering how this fits with age discrimination, as surely in most circumstances the” higher cost employee” would be in that category due to age/ length of service?
I would appreciate views on this … thanks

SarEl

This is a perfectly legal provision no matter whether it is compulsory or voluntary - cost also associates to wages and a younger person may cost more if their wages are higher. However, in terms of a voluntary redundancy it is more than ok. Nobody is making you redundant - you are choosing it. If you have chosen it then you can hardly claim discriimination in the loss of a job you chose to loose! See the point?

anna_grant

SarEl wrote: »

This is a perfectly legal provision no matter whether it is compulsory or voluntary - cost also associates to wages and a younger person may cost more if their wages are higher. However, in terms of a voluntary redundancy it is more than ok. Nobody is making you redundant - you are choosing it. If you have chosen it then you can hardly claim discriimination in the loss of a job you chose to loose! See the point?

I think it's the other way round - if two people tie, then they are more likely to choose the one who costs them less to make redundant i.e. not the OP. That's why they are querying it.

However, they are talking about 'redundancy selection criteria' which is usually applied once expressions of interest in 'voluntary redundancy' have occurred.

In the current economic climate, it would be unlikely that 1/4 of the workforce would elect for VR.

Oh - and it's not illegal. You would generally be rated on a scale from 0 to 10 depending on the cost of making you redundant.

SarEl

anna_grant wrote: »

I think it's the other way round - if two people tie, then they are more likely to choose the one who costs them less to make redundant i.e. not the OP. That's why they are querying it. You misunderstand what I said. I said that making decisions which included the grounds of which person would be cheaper was lawful - it is not discrimination. The OP assumed that his position would make him the more expensive option. That isn't the case. What his redudnancy costs the authority would depend on the totality of a set of conditions such as his current wage and pension costs, costs of enhancements, length of service etc. All I said was that including such a "cost anlaysis" is not unlawful and not discrimination. If it were discriminatory (which it isn't) then it wouldn't matter which way around it was discriminatory - it is equally unlawful to discriminate against someone on the grounds of their age or lack of it. So either way around, had it been a discriminatory clause, it would have been discriminatory. The fact that it isn't depends on the fact that cost in this case is not tied purely to age related criteria.

However, they are talking about 'redundancy selection criteria' which is usually applied once expressions of interest in 'voluntary redundancy' have occurred. Yes I am aware of that - and it is still a lawful criteria.

In the current economic climate, it would be unlikely that 1/4 of the workforce would elect for VR. I have no idea what this means. Who said that 1/4 of the workforce would apply.

Oh - and it's not illegal. Yes, that's what I said isn't it? It's not unlawful. You would generally be rated on a scale from 0 to 10 depending on the cost of making you redundant. That depends entirely on what the system the employer uses entails. The scale could be a number of things.

I do not see why you think I have said anything different from what you have later said. I said that it was lawful to include such a criteria - and so did you.

getmore4less

SarEl wrote: »

This is a perfectly legal provision no matter whether it is compulsory or voluntary - cost also associates to wages and a younger person may cost more if their wages are higher. However, in terms of a voluntary redundancy it is more than ok. Nobody is making you redundant - you are choosing it. If you have chosen it then you can hardly claim discriimination in the loss of a job you chose to loose! See the point?

THe query relates to the other way round, NOT losing the job when you want because due to age you are more expensive to make redundant.

anna_grant

getmore4less wrote: »

THe query relates to the other way round, NOT losing the job when you want because due to age you are more expensive to make redundant.

Entirely the point I was trying to make.

They want to take VR but are concerned that they won't as they will cost too much.

SarEl

anna_grant wrote: »

Entirely the point I was trying to make.

They want to take VR but are concerned that they won't as they will cost too much.

We are still tallking at cross purposes. If it were discrimination it would be discrimination either way around. So being made redundant or not being made redundant on discriminatory grounds is discrimination! But since the clause isn't discriminatory it also isn't discriminatory either way around.

ktdd18

I am a union rep in the NHS and we have just gone through a very similar situation. It is illegal to use cost as the only factor but not illegal if other factors are involved. For example in our situation there were two other factors, performance and attendance and if these scored equal then cost became a factor. Staff were given points for each section and these were added together. Only people below a certain points level were allowed to even apply. This meant that the most expensive ones didn't get a look in. Three members had to go and only four were in the pot. Only one of the four wanted to go and so the other two were made compulsorily redundant. Though there were others who would have liked to go on voluntary redundancy and weren't given the option. Unfortunately this is likely to be the case for most if not all of the public sector cuts as they are a cost cutting exercise and as you have said yourself long service employees are by far the most expensive to let go.
I would say apply but don't get your hopes up as chances are you will be too expensive.

hoops120

Thanks for all your replies.

I am happy to continue working, but would be equally happy to be offered VR, though my inclination (as confirmed by ktdd18) is that I will be "too expensive". I will not let that deter me from making an application, but won't get my hopes up

getmore4less

SarEl wrote: »

We are still tallking at cross purposes. If it were discrimination it would be discrimination either way around. So being made redundant or not being made redundant on discriminatory grounds is discrimination! But since the clause isn't discriminatory it also isn't discriminatory either way around.

But your initial response did not address the op specific query on this.

I guess it must be part of the training for legal people , try to avoid the answer that actualy tells the person what they need to now if you can so they have to ask for clarification.

This is a perfectly legal provision no matter whether it is compulsory or voluntary - cost also associates to wages and a younger person may cost more if their wages are higher. However, in terms of a voluntary redundancy it is more than ok. Nobody is making you redundant - you are choosing it. If you have chosen it then you can hardly claim discriimination in the loss of a job you chose to loose! See the point?

The OP was asking what happens if they are not chosen on cost grounds

Your answer just gave you a load more work to clarify.

50Twuncle

hoops120 wrote: »

I have worked for them for almost 40 years (half time for the last couple of years) and am over 55 years of age. Hence I would qualify for the maximum redundancy package, and be entitled to immediate payment of my pension (unreduced I think).

You may find that this is not the case - and redundancy lump sum will reduce after peaking at age 50 - this is how the Civil Service scheme works anyway.....
They presumably assume that the nearer you are to retirement - the less it should cost to dispose of you ?