Civil Service redundancy pay cuts slammed by unions

Plans to slash thousands of pounds of compensation paid to civil servants being made redundant have been blasted by unions as an “outrageous” attempt to cut jobs on the cheap.

The government today announced proposals to reform what it dubs an “inflexible and expensive” civil service compensation scheme. But PCS union said the changes, expected to come into effect on 1 January 2010, would represent a huge financial loss amounting to tens of thousands of pounds at a time when jobs were at risk.

In April, Personnel Today reported that the government was considering cutting redundancy packages from up to three years’ pay to as little as 24 weeks’, to mirror the private sector terms and save £500m over the next three years. Legal experts told the magazine the changes would be rushed through before sweeping job cuts across departments.

PCS general secretary Mark Serwotka said: “These proposals are a disgraceful attempt by the government to replace a fair, negotiated right to decent compensation with a bargain basement pay-off at a time of massive insecurity over jobs.
 
“With both of the main parties, backed by the head of the Civil Service, Gus O’Donnell, talking about slashing public spending, tens of thousands of PCS members are worried about their futures and their livelihoods.”

Unions now have 12 weeks to respond to the government’s latest proposals, but are considering applying for a judicial review to halt the process.

A statement on the proposals, listed on the Civil Service website, said: “The proposed approach is intended to provide fair outcomes for all stakeholders – staff, employers and taxpayers – and to improve accountability.

“The current terms are set out in the Civil Service Compensation Scheme (CSCS) and have changed little since the last major revision in 1987. The terms are now seen as inflexible and expensive and have been challenged as age discriminatory.”

Included in the proposals is the plan to remove the age-disciminatory ‘50+ rule’ that states officials over 50 applying for early retirement can get immediate payment of unreduced pensions and additional years of service credited as well.

PCS’s national executive will meet on 6 August to consider the proposals in full. The deadline to respond to the govermnent is 5 October.

The changes – in brief

Compulsory redundancy

  • Standard terms will apply across departments
  • Staff will get a service-linked redundancy payment of up to a maximum of two years’ pay (civil servants who have worked 20 years at Whitehall are currently entitled to three years’ pay). 
  • The current compulsory terms will remain for staff whose current period of service began before 30 July 2007 and who are made compulsorily redundant before 1 April 2011.

Voluntary redundancy

  • Departments can set own terms to suit their budgets 
  • Compensation will be delivered through severance payments subject to an overriding maximum of two years’ pay
  • Departments will retain the flexibility to offer early retirement
  • Departments will be required to publish details of their expenditure annually.

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