8 October 2010
Civil service unions have agreed a new redundancy compensation scheme with the Cabinet Office, which will limit payouts to 21 months, it has been announced.
Cabinet Officer minister Francis Maude announced proposed changes to the civil service redundancy scheme in July this year. Under the original proposals, compensation would be capped to one year’s annual salary for compulsory redundancies and 15 months for voluntary.
Yesterday, the five unions – Prospect, the FDA, the POA prison workers union, the GMB and Unite – confirmed that the new agreement would allow up to 21 months’ pay plus three months’ notice for voluntary redundancy. The cap for compulsory redundancy would stay at 12 months’ salary. As part of the agreement, all redundancy payments will be calculated on a minimum salary of £23,000 even if an individual earns less.
Dai Hudd, Prospect’s deputy general secretary, said: ‘This deal is both necessary and fair. It meets the needs of our members to have a decent redundancy scheme, but is also affordable to government and the taxpayer, important in the current economic climate.’
The unions had challenged the legality of Maude’s use of a Money Bill – designed to pass financial legislation without the standard scrutiny from the House of Lords. But Maude admitted in Parliament last month that the Bill was a ‘blunt instrument’ to persuade the unions to accept changes to the scheme.
The previous government had reached an agreement with the unions in February this year which would limit the cap to two years’ pay, in contrast to the six years’ pay that is possible in the current system. However, the Public and Commercial Services union won a legal challenge and this agreement was nullified.
Maude also acknowledged that had the PCS not won its case, the government would have continued with the February agreement.
The PCS
declined to involve itself in the recent negotiations. It said that the
government was seeking ‘to override the wishes of the majority of its workforce
by imposing cuts to civil service redundancy pay with a view to making massive
job cuts’.
The union represents twice as many employees as the other unions combined, a
spokesman said. The High Court ruled that any changes needed the agreement of
all the civil unions, he said, adding that the PCS is to ‘proceed with a
challenge under the Human Rights Act to the current legislative attempts to cut
redundancy pay’.
