Civil servants' redundancy offer revised
- 11 October 2010
- From the section UK Politics
The government has raised its redundancy offer to civil servants following protracted talks with unions.
The Cabinet Office says the maximum payout should now be 21 months' salary - having previously offered a cap of 15 months' pay.
Several civil service unions have recommended the latest offer to their members, but the Public and Commercial Services Union (PCS) opposes it.
Under current law, all six have to agree before the change is made.
Ministers are keen to reform the current system, which pays out up to six years' salary to civil servants taking redundancy, arguing it is too expensive to continue in a climate of austerity.
But the unions argue that many workers receive low pay and that redundancy terms should not be undermined.
The latest government offer, which would apply to about 500,000 people, follows a year-and-a-half of negotiations.
The Labour government managed to do a deal with five of the unions, but not the largest one - the PCS - which successfully had the reformed scheme thrown out by the courts.
The latest offer, which provides one month's salary for every year worked, has been recommended as the "best terms that can be achieved by negotiation" by Unite, the GMB, Prospect and the FDA.
However, the terms of the deal will have to be approved by individual members in ballots by the end of the month.
The executive of the Prison Officers Association will meet on 12 October to discuss the offer.
The Cabinet Office says payments should be capped at 21 months' salary for voluntary redundancies and 12 months' salary for compulsory redundancies.
The new proposal also states that civil servants who are made redundant - voluntarily or compulsorily - should be given a three-month notice period.
Anyone earning less than £23,000 would be deemed to get that sum for the purpose of calculating redundancies, it adds.
Meanwhile, anyone earning more than £149,820 a year would have their salary capped at that figure for the purpose of working out payments.
Cabinet Office Minister Francis Maude said: "Throughout this process we have been committed to reaching a negotiated settlement that is affordable and gives protection to lower-paid civil servants.
"These five unions - Prospect, FDA, Prison Officers' Association, Unite and GMB - have made great efforts during the talks to reach an agreement about a sustainable scheme, while securing the best deal for their members."
He added: "The previous scheme was simply no longer fit for purpose and had to change. In today's tough economic climate, we would be failing in our duty to the taxpaying public if we had allowed its excesses, which saw some employees walking away with packages worth more than six years' pay, to continue."
Mr Maude also said: "There is of course one name missing from the list of unions, the PCS. I greatly appreciate the efforts of the five other unions whose constructive proposals have allowed us to reach these new terms.
"I very much regret that the PCS leadership has not been able to sign up to this provisional agreement at this time."
The PCS's ruling national executive committee is demanding further talks with Mr Maude, to explain why it believes the latest offer is unacceptable.
If the talks fail or Mr Maude refuses to agree to them, the union says it will ballot its members, with a recommendation to reject the deal, and press ahead with a challenge under the Human Rights Act to the government's attempts to cut redundancy pay.
PCS general secretary Mark Serwotka said: "We remain committed to reaching an agreement, but we will not be bullied into agreeing massive cuts in redundancy terms simply because the government wants to lay waste to our members' jobs and livelihoods more cheaply.
"PCS is not just one union out of six. We are the overwhelming voice of civil servants, with twice as many members as the other five unions combined. It is disappointing that the other unions appear willing to accept what is by any measure a severe cut in redundancy rights that effectively tears up the contracts their members have signed."