GOVERNMENT staff are being consulted over plans to cut rates of redundancy pay.
iomtoday reported concerns back in October about whether the government could actually afford to make staff redundant.
We revealed that a civil servant who loses the job could be eligible for a lump sum severance payment of up to three years’ pay.
Now the joint working group set up to look at how the system can be modernised has issued a consultation notice to government staff, outlining the position of both the employer’s and employees’ side.
It stresses that nothing has yet been agreed and so the notice should not be read as the final negotiated position.
Main proposals put by the employers’ side are for cash compensation in cases of genuine compulsory redundancy to be based on length of service subject to an absolute maximum of 12 months’ pay, while in other cases such as voluntary redundancy, the absolute maximum will be 21 months’ pay.
Departments will retain the flexibility to offer early retirement to those aged 55 or more but subject to certain constraints.
Transitional arrangements will apply for those nearing retirement age and the lower paid.
It also proposed there will be no enhancement of pensions in the future but there will be an ability to use an element of the compensation payment to purchase additional pension.
The consultation notice stresses that the proposals will still provide terms for voluntary and compulsory redundancy that compare well with many employers.
It accepts that some may see them as still too generous given that the statutory entitlement for redundancy pay is one week’s pay for each year of service. But it says it is important to strike the right balance between current arrangements, while not imposing costs on the taxpayer that are currently unsustainable.
The consultation notice says employers have sought to reassure staff that the changes will not be a prelude to mass redundancies.
But it insists that change is inevitable. It says most public sector workers have managed to retain existing redundancy compensation levels for a much longer period than expected, entirely because the unions ensured this was part of the negotiating position.
Change will only be introduced after staff have been asked to vote on it and give their views.
Minister Allan Bell told the Examiner: ‘We’ve horrendous settlements in the past which we cannot sustain.’
He added: ‘There is a need for fair and balanced settlements to ensure departments don’t incur levels of expenditure when they reduce the size of their workforce that exacerbates the situation.
