Redundancy terms

[POSTMAN]

Many thanks to vanman for posting this in another thread.

As ever with the MTSF agreement - it's not as straightforward as that.

The terms were changed in 2007 to take into account new Age Discrimination Legislation.

For individuals between 50 and 60 in the pension scheme, the terms remain 6 months pay and immediate payment of an enhanced pension and lump sum (if applicable). Beware though that those individuals age between 50 and 54 can be denied the full terms if there are more applicants for VR than the number of redundancies as there is a cost ceiling applied in these cases. But only where there is an over-subscription of volunteers.

For those under 50 and over 60 the terms changed to the statuatory redundancy terms x 3.75.

The full details of all the changes made at that time are as follows:

Managing the Surplus Framework
Revisions to Ensure Compliance with Age Discrimination Regulations1.

1. Introduction

The following changes have been made to the Managing the Surplus Framework and Managing the Surplus Framework 2 agreements in order to ensure that the agreement is not in breach of the Age Discrimination Regulations that became law in 2006.

The existing agreement is only modified in the ways stated in this document, in all other ways, the agreement remains unaltered.

2. Selection Criteria

The existing selection criteria for VR that are contained in Appendix 5 of MtSF remain unaltered. The only fair method of selection that did not look at age and service as criteria is a completely random method of selection which would not reward loyalty or take into consideration the health and lifestyle factors that would make it fair.

3. Voluntary Redundancy Terms

Redundancy payment arrangements that mirror the statutory redundancy scale are deemed to be lawful under age discrimination legislation. Therefore, the voluntary redundancy terms contained in paragraph 2.1 of Appendix 6 of MtSF are replaced by a formula of statutory redundancy pay (uncapped) multiplied by 3.75.

The formula is:

0.5 week's pay for each full year of service where age during year less than 22
1.0 week's pay for each full year of service where age during year is 22 or above, but less than 41
1.5 weeks' pay for each full year of service where age during year is 41 +

Part years of service no longer count in calculating the redundancy pay.

The calculation is based on actual pensionable pay and is not limited to the prevailing maximum rate of weekly pay under statutory redundancy provisions.

A ready reckoner of voluntary redundancy pay that would be paid using this formula is attached at Appendix A.

4. People Aged 62 and Over

The element of paragraph 2.5 of Appendix 6 of MtSF and the entirety of paragraph 2.6 are removed. These relate to reducing compensation for people aged 62 and over. However, paragraph 1 (e) of Appendix 5 is interpreted that anyone who has entered the duty to consider process prior to normal retirement will be treated as having entered into a process that would, in any event, result in retirement and will not be eligible for voluntary redundancy with compensation.

5. Resourcing Process

Specific references giving priority to people aged 50 to 60 in the resourcing processes contained within MtSF are no longer valid. That means that the resourcing process remain the same, except there is no longer a change in priority for people aged 50 to 60 and those elements of the agreement are to be ignored.

6. Pay Protection

Appendix 2 of MtSF has been amended to such an extent that Appendix 2 of this agreement replaces it.

7. Effective Date of Agreement

Paragraphs 2 and 4 have immediate effect from signing this agreement. Paragraphs 3, 5 and 6 take effect from 1st June 2007.

Gareth Evans
Head of Industrial Relations Royal Mail Group Limited

Ray Ellis Assistant Secretary CWU
1st May 2007

The golden rule with anything relating to redundancies is to speak to your rep - do not just accept what the business tell you. It has been known to be wrong!!

[yorksaint]

Could somebody define the term: 'enhanced pension'? Ta!

[baldrick]

Could somebody define the term: 'enhanced pension'? Ta!

You get up to 6 and two-thirds years added to your pensionable service provided that it
doesn't take you to over 40 years service or over 60 years of age, ie if you are 55 and
take EVR you will get an additional 5 years enhanced (as long as it doesn't give you over
40 years), if you are 56 it would be 4 years, 57 : +3 years, 58 : +2 years, 59: +1 year.