Civil Servants’ Redundancy Pay Could Be Changed

It is well-known that government ministers are currently considering all possible methods of reducing government expenditure. A new story to hit the headlines states ministers are to meet civil service union officials to iron out possible changes to redundancy pay.

Civil service job cuts

Last week a leaked Treasury budget presentation suggested that up to 600,000 public sector jobs would go over the next 5 years, starting with cuts this year. Given the labour-intensive nature of many government departments, a cut in spending ultimately means a cut in people.

Although the figure of 600,000 jobs could be lost over the next 5 years has been bounded around the press this could actually be a likely figure. The Chancellor, George Osborne, has told government departments to work on the basis of 40% cuts across the board, which would naturally result in thousands of job losses.

Cutting redundancy pay

It may be very difficult for the government to actually lower redundancy pay given Labour’s failure in court to reduce redundancy payments earlier this year.

Civil Service unions are concerned that the new coalition government will use emergency legislation to overturn the court ruling.

The news of potential alterations to redundancy pay for government workers (in the form of the Civil Service Compensation Scheme) has been confirmed by the Cabinet Office, which is the government department for ministers.

The Cabinet Office has said that it wants to change the Civil Service Compensation Scheme (CSCS) so that it is more in tune with standard practice in the private sector.

The government hopes to make these changes in a collaborative way with civil servants and unions. From the initial reports it would appear that any changes would have the silver lining of increased protection for the lowest paid government workers.

The unions’ view

Backlash from the unions seems to centre around the governments aim to bring redundancy pay terms into line with those in the private sector without tackling pay issues..

It is often argued that the civil service are given better terms for their redundancy pay, pensions and other employee benefits because they are generally paid a lot less that counterparts in the private sector.

In this light it is seen as unfair that the government want to change an area for which they benefit without changing anything to do with pay, for which they do not benefit.

Changes fair?

Some redundancy pay settlements in the past have been as high as six-times annual salary, which far exceeds standards in the private sector. In this light it does seem that changes to redundancy pay should be brought more in-line with private sector workers but maybe not to equality given the substantial pay gap.