Civil service redundancies could be "delayed" following a High Court ruling that changes to Whitehall severance packages were unlawful.
Rejected CSCS changes
Whitehall severance pay would be capped at a maximum of two years' salary for employees earning £25,000 or more (civil servants who have worked in Whitehall for 20 years are currently entitled to three years' pay).
People who rejoin the Civil Service after receiving a severance payment will be required to pay some of the money back.
Earlier today, the High Court ruled that the PCS union's judicial review of planned changes to the Civil Service Compensation Scheme (CSCS) was successful because changes to workers' accrued benefits could not be altered without their consent or union agreement.
The ruling means the government's proposed changes - intended to create £500m worth of Whitehall savings over the next three years - will have to be redrafted and renegotiated.
It was feared that the government planned to rush the changes through ahead of deep Civil Service job cuts, but employment lawyers said the government could now delay Whitehall cuts and hold out for an agreement with the unions over a revised CSCS to save money on redundancies.
John Read, employment law editor at XpertHR, told Personnel Today: "The government might well choose to delay redundancies if it feels it still has a chance of making changes to the scheme after consulting the union, and the union's statement indicates that it recognises changes are needed."
Helen Farr, a public sector employment partner at law firm Pinsent Masons, agreed the government could postpone redundancies, but warned if the changes took too long to implement it could make the redundancies anyway.
She said: "The government may well put redundancies on hold pending the introduction of new terms, but I don't think its going to be possible to do a deal in the near future, so it depends on how much time the government has to play with.
"It may just have to bite the bullet and make the redundancies anyway."
Farr added the government's negotiations would now be much more difficult as the five unions which previously agreed to the changes (Prospect, Prison Officers Association, Unite, GMB and FDA) could push for more concessions.
"The government is now in a much worse position as they have to do a new deal with all six unions. The five unions are now going to want even more concessions and fall in behind the PCS."
Stephen Hocking, employment partner and head of public law at Beachcroft, warned it was "very unlikely that a new package could be in place this year".
He added the government could seek an agreement with unions by reducing the savings sought from the scheme, phasing in the changes, or by promising no compulsory redundancies.
Meanwhile a Cabinet Office spokesman said: "We are disappointed by the High Court decision and we are considering the terms of the judgment."
He refused to comment on whether the government could look to appeal the ruling.
Both sides have two weeks to make their final submissions, and the PCS said it would wait to see what action the next government would take.