Plans to cut generous redundancy payments for Britain’s 500,000 civil servants could trigger a legal challenge by public sector unions, the Times has reported.
The Cabinet Office has proposed big cuts in redundancy terms, which can lead to payouts of up to 6.5 years’ salary, according to the paper.
The average Whitehall severance payment is three years’ pay – much more generous than most public sector schemes.
A consultation paper issued this month proposes that compulsory redundancy should be capped at two years’ pay. Generous early retirement deals should also be scrapped, it suggests.
The move comes after an announcement by prime minister Gordon Brown this year that Whitehall severance terms would be cut to save £500m over three years.
It also coincides with growing concern about the rising costs of public sector pay, pensions and benefits in the middle of a recession.
The Times has also learnt that several councils have either changed or intend to alter generous severance terms.
The Public and Commercial Services Union (PCS), which represents the lower-paid officials, said that the government wanted to cut jobs on the cheap.
“This is a disgrace and is particularly cynical at a time when we can clearly see that tens of thousands of jobs are at risk over the next few years,” said Mark Serwotka, the PCS general secretary.
The union said it would be taking legal action to try to stop the terms coming into force.
The Cabinet Office said it had no clear record of present spending on compulsory redundancy. The proposed changes to severance pay will be introduced for all new entrants early next year.
But the FDA – which represents the top 4,000 mandarins – is furious that present terms for all staff will only be protected until 2011.