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June, 1987, Vol. 110, No. 6
Britain's redundancy payments
for displaced workers
In 1965, British policymakers created the Redundancy Payments Act, calling for advance notification of workers who are to be laid off (made "redundant") and mandating lump sum payments to those affected. In the years that followed, revisions strengthened requirements for joint labor-management planning to avoid redundancies, but the basic structure of redundancy payments remained unchanged. The Act was an effort to spur industrial modernization, but with recent high levels of unemployment, it has taken on a welfare role, providing payments to displaced workers who may face prolonged periods of unemployment. Great Britain has attempted to mitigate the effects of economic displacement by mandating private-sector payments with partial government reimbursement of the costs. The primary and secondary impacts of the Act provide a useful backdrop for the current discussion of policies to deal with displaced workers in the United States.
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