Civil service redundancy pay strike ‘won’t work’ says union boss

On 4 Feb 2010 in Employment law, Redundancy

Five civil service unions accepted controversial government changes to the compensation scheme for workers made redundant because they believe the strike and legal action threatened by the PCS union are doomed to failure, according to a union boss.

On Tuesday, the Cabinet Office announced that compulsory redundancy packages will be capped at £60,000 for those earning less than half that amount, affecting four-fifths of the workforce.

Those earning more than £30,000 would see redundancy payments slashed from up to three years’ pay to a maximum of two years’ pay.

The PCS union immediately launched a strike ballot and lodged papers for a judicial review, arguing that the changes – due to come into effect in April – needed to be agreed with the unions rather than imposed.

But the remaining members of the Council of Civil Service Unions – Prospect, FDA, the Prison Officers’ Association, Unite and GMB – accepted the deal, after improved terms were agreed in January.

Civil Service Compensation Scheme: What’s changing?

  • Civil servants made compulsorily redundant will receive cash compensation of up to two years’ pay – down from three years’ pay.
  • For the lowest paid, cash payments will be capped at three years’ pay or £60,000, whichever is lower. To qualify for the maximum payment, staff need to have worked in the Civil Service for 20.5 years or more.
  • If made compulsorily redundant, staff aged at least 50 as of 31 March 2010, and with a minimum of five years’ service, will continue to receive existing compulsory retirement terms based on their years of service as of 31 March 2010.
  • Anyone who receives a severance payment and then returns to work for the Civil Service will have to pay back their cash settlement on a pro-rata basis.
  • The minimum qualifying period for a redundancy payment will be increased from one to two years.
  • The new compensation scheme will have no effect on existing civil service pension schemes.

Source: Cabinet Office

The new offer included protection for members aged 50 or over with five years’ service up to the date of the change, who will retain compulsory early retirement terms for service to this point; and protection for low-paid members earning £20,000 or less, so that staff made redundant retain a lump sum of up to three times their salary.

Prospect said the new offer “goes a significant way” to resolving matters likely to be dealt with at any judicial review, adding that, given the improvements secured, it considers it “unlikely” that industrial action would deliver better terms.

The five unions decided against legal action because of the timescale of the changes and the slim chance of success, according to Dai Hudd, Prospect deputy general secretary.

“The legal action was over a finite point of law on whether the scheme accrues in the way a pension does – not about contractual rights as the PCS has suggested,” he told Personnel Today. “And trade unions and the law courts are not exactly simpatico – we don’t want Lord Justice right-wing bastard ruining the deal.”

A spokesman for the PCS said the five unions represent a minority of civil service employees – 100,000 compared to 270,000 who are PCS members. “We are of the view that the proposals don’t go far enough to protect existing workers’ rights,” he added.

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