Older workers could face lower redundancy payments when new anti-age legislation comes into force next year, a union report has warned.
The TUC says reducing awards could send the wrong signal to employers
The TUC is worried the government may decide to reduce payouts to the level awarded to young people.
Currently, workers over the age of 41 who are laid off receive higher statutory redundancy payments.
TUC leader Brendan Barber warned a reduction would send the wrong signal to employers to cut other benefits.
Under current law, young people who are made redundant receive one weeks wages for each year of service.
But people over the age of 41 receive higher statutory redundancy payments, at one and a half week's pay for each year after that age.
The TUC is concerned that the introduction of new European rules to outlaw age discrimination from October 2006 will lead the government to consider cutting the amount of redundancy for older people.
Mr Barber said: "European rules to outlaw age discrimination are welcome. Unions have campaigned for this for years.
"But it would be a real shame to spoil this advance by levelling down statutory redundancy payments so that workers of all ages get the same lower rate.
"It sends the wrong signal to employers who may feel free to cut other benefits to their older staff in the same way."
The Department of Trade and Industry has said it would aim to find a balance that was fair to workers and did not place unwarranted costs on business.