The government is looking to slash Civil Service redundancy pay and change pension terms for staff who leave through voluntary or compulsory redundancy.
The Cabinet Office has this week published a supplementary consultation document on reforms to the Civil Service Compensation Scheme (CSCS), which proposes limiting voluntary redundancy payments to three weeks’ pay per year of service, introducing a maximum redundancy and exit payment limit of 18 months’ salary, and capping complusory redundancy payments at nine months’ salary, among other measures.
It estimated that the proposed package would reduce the cost of an average exit entitlement by 25.9% compared to the 2010 terms.
The move follows Boris Johnson’s announcement in May to cut Civil Service headcount to 2016 levels, by around 91,000 roles.
The Public and Commercial Services Union (PCS) said the proposed terms are a marked downgrade from those on offer currently – three weeks’ salary per year, up to 21 months, for voluntary redundancy; and one month per year, up to 12 months, for compulsory redundancy.
PCS general secretary Mark Serwotka described the proposals as an “insult”.
“Coming on top of a derisory 2% pay offer and the threat of 91,000 job cuts, these proposed cuts to our members’ redundancy terms add insult to injury. It is clear that the government wants to get job cuts done on the cheap,” he said.
The consultation document says the government needs to ensure that public finances are sustainable, and that the proposals are believed to “strike a balance between achieving value for money for the taxpayer and fair compensation terms, while recognising that there are frequent circumstances where offering an attractive exit package is in the interest of the organisation”.
The government attempted to reform redundancy terms and exit payments in 2016, but this was blocked by the High Court in 2017 as ministers had failed to sufficiently consult with trade unions.
Other measures being proposed include:
- only allowing Civil Service employers to top up pensions from age 56 – to track 10 years behind state pension age
- introducing a partial pension buyout for those that have reached the minimum pension age where their cash payment is not sufficient to fully buy out their pension;
- reforming the “efficiency compensation tariff” to align with voluntary redundancy terms. Currently, civil servants are entitled to additional pension compensation if they are dismissed on “efficiency” grounds. This tariff will be extended to additional pension schemes;
- introducing clawback arrangements for individuals who return to an organisation that uses the CSCS within six months of recieving a compensation payment.
Serwotka said the PCS would fight the proposals. “We will also make this a feature of our national campaign on jobs, pay, pensions and redundancy terms over which we will be balloting members for industrial action in September. Our members are sick and tired of being treated with disdain by their own employer and are determined to fight back,” he added.
Mike Clancy, general secretary of the Prospect trade union, said: “No other employer, public or private, would propose reducing redundancy terms at the same time as savage job loss proposals and do so with the aim of reaching agreement. We will be working with other unions to oppose detrimental changes to the Civil Service Compensation Scheme and exploring every route – including industrial and legal ones.”