Cap on redundancy payments not age discrimination

A cap on redundancy payments, which limited them to the amount an employee would have earned had he remained in the post until the age of 65, was not age discrimination, the EAT has ruled.

12 Jul 2010

A cap on redundancy payments, which limited them to the amount an employee would have earned had he remained in the post until the age of 65, was not age discrimination, the EAT has ruled.

Richard Hastie worked for almost 40 years in coffee processing for Kraft foods before taking voluntary redundancy in 2008. The tribunal heard that this entitled him to a prima facie payment of £90,000.

Giving judgment in Kraft Foods UK v Hastie (UKEAT/0024/10/ZT), Mr Justice Underhill, president of the EAT, said that Hastie was made redundant just over two years from his 65th birthday.

He earned around £33,800 a year and could not have earned £90,000 before he reached the default retirement age. Underhill J said the cap operated to cu...

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