British gov't announces major restructuring of redundancy for public sector workers

The new British coalition government is to cap current generous redundancy packages for civil servants as part of the most far-reaching and hard-hitting cut in government spending since the Second World War, the minister for the Cabinet Office, Francis Maude, confirmed on Tuesday.

The coalition government has chosen as its principal task the reduction of the record deficit in public borrowing, currently standing at 153 billion pounds (about 240 billion U.S. dollars) for the financial year 2010/11.

The aim is to cut 100 billion pounds (about 150 billion U.S. dollars) from government spending by 2014/15.

As part of the government's deficit reduction plan, Maude said that he will introduce legislation "as soon as possible to cap redundancy payments made to civil servants to bring the payments in line with the best practice in the private sector.

Maude said the government had made the decision to legislate " with reluctance," but that it had "become necessary because of current economic climate."

Maude also blamed the Public and Commercial Services Union (PCS) , which had opposed a restructuring of redundancy payments proposed by the previous ruling Labor government.

His department said in a press release that earlier this year the previous government put in place a reformed scheme with the agreement of five out of the six civil service unions. The sixth, PCS, won a High Court case opposing the restructuring, said the press release.

Maude said: "What is on offer now is simply untenable and completely out of kilter with what is on offer in the wider public sector and the private sector.

"Our ambition now is that a negotiated, sustainable and practical long-term successor to the existing scheme can be agreed -- one that is flexible and appropriate for current economic climate and also fair for lower paid workers."

In a statement to the House of Commons Maude said legislation would limit redundancy payments to 12 months' salary, and voluntary redundancy payments to 15 months' salary.

A legal bar to the changes being implemented will also be removed.

The Treasury, the government's financial department, has confirmed that about 600,000 public sector jobs are on the line as a result of the planned budget cuts. Capping redundancy pay will save a lot of money.

Under the current scheme, some civil servants with a long work history may be entitled to compensation higher than the legal minimum and in some cases longstanding employees are eligible for a package worth over six years' pay, said the Cabinet Office in a statement. The average payout is about 60,000 pounds (about 90,000 U.S. dollars).

PCS general secretary Mark Serwotka, whose union represents 120, 000 civil servants, threatened further legal action to stop the government's plan to cap redundancies.

He said that the PCS had successfully proved that it was unlawful to impose cuts to rights that staff have earned through their service, "so the government's complaint that this has held up negotiations is just a smokescreen to allow it to force on civil servants worse conditions than anywhere else in the public sector."

He added: "Following the High Court ruling we wrote to the Cabinet Office offering further negotiations to agree a fair and legal deal, so Francis Maude's announcement today betrays a breathtaking arrogance and a contempt for his own workforce. We will be exploring the legal implications of what the announcement says.

"There would be no plan to save money on redundancy pay without a plan -- the detail of which has not been revealed to the public or the unions -- to make job cuts on an unprecedented scale."

However, the other five unions which had agreed to the Labor government's more lenient reforms, will not now be happy that the PCS stopped those coming into effect because they now face much harsher terms.

Source: Xinhua