Changes to civil service redundancy 'could be unlawful'

6 Jul 10
The Cabinet Office's proposed limits on civil service redundancy pay could be unlawful, lead to industrial action and end up costing the government more money, unions are warning

By Jaimie Kaffash

6 July 2010

The Cabinet Office’s proposed limits on civil service redundancy pay could be unlawful, lead to industrial action and end up costing the government more money, unions are warning.

The government intends to cap compensation at 12 months pay for compulsory redundancy and 15 months for voluntary redundancy. It plans to do this via a money Bill, which would prevent the House of Lords from blocking the move for more than a month, as opposed to a year with ordinary Bills.

The previous Labour administration reached agreement with five of the six civil service unions in February this year to bring their terms in line with the rest of the public sector – a cap of two years pay. But the High Court ruled this unlawful after an objection from the Public and Commercial Services union. 

In his letter to civil service unions today, Cabinet Office Minister Francis Maude said: ‘Our action today to limit the excesses of the current prohibitively expensive terms is necessary because of this unilateral action in contesting the previous government’s scheme.’

He added: ‘Had the PCS shown the same willingness to negotiate as the other five civil service unions then today’s action might not have been necessary.’

But Dai Hudd, deputy general secretary of Prospect, told Public Finance that singling out the PCS was ‘not conducive to reaching an agreement’. He added that it was ‘fundamentally unacceptable’ for the terms to be half those of other public sector workers.

He also said his union was seeking clarification over whether a money Bill would be lawful. ‘Our initial thoughts is that the money Bill is about revenue resource rather than cutting entitlements, and we are consulting lawyers as we speak,’ he added. Prospect’s special executive would be meeting on July 29, he said, and industrial action ‘could not be ruled out’.

He also said the government had ‘created a difficult paradigm’ for itself. ‘On one level, they are under pressure to create cuts. But they can only make cuts under these existing terms.’ He added that the earliest ministers could get the Bill through would be October, and it would be longer if there was hostility. ‘It is a high-risk strategy for them.’

PCS general secretary Mark Serwotka reacted angrily. He said Maude’s citing of PCS’s actions was ‘a smokescreen to allow it to force on civil servants worse conditions than anywhere else in the public sector’. The announcement betrayed ‘a breathtaking arrogance and a contempt for his own workforce’, he added, while confirming the union will be exploring the legal implications.

A spokesman for the Cabinet Office told PF it was ‘hypothetical’ whether the government would have introduced legislation had the February agreement been ratified.

He added: ‘The government published a document a few weeks back and one of the priorities was to introduce compensation terms in line with the private sector.’

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