Unions claim redundancy cap shows government doesn’t honour agreements

Unions have attacked the government’s plans to cap redundancy payments for public sector workers, confirmed in the Queen’s Speech.

The cap, which forms part of the Enterprise Bill, will limit redundancy deals for outgoing public sector staff to under £100,000. It has been sparked by high-profile stories of senior executives receiving six-figure pay-outs when leaving public sector jobs, often to be hired again in the sector a short time later.

According to the Treasury, more than 1,800 public sector employees took such pay-outs in 2013.

However, the unions argue that the reality is that the cap will have a much bigger impact on frontline nurses, teachers and firefighters.

FDA general secretary Dave Penman said: “Whilst the rhetoric around the government's plans is about cutting redundancy pay-offs for fat cats, the reality is that this cap will impact upon nurses, teachers, firefighters, police officers and paramedics.”

The FDA argues that the new cap would also go against the deal agreed with the then Cabinet Office minister Francis Maude in 2010 on the Civil Service Compensation Scheme.

The unions negotiated a deal with the minister that capped pay-outs for workers subject to compulsory redundancy at 12 months’ salary, and 15 months’ salary for those taking voluntary redundancy. At the time Maude called the settlement “fair for civil servants and fair for other taxpayers”.

Penman said: “In the Civil Service we have already reformed redundancy arrangements in a deal that the Conservative minister for the Cabinet Office at the time, Francis Maude, described as 'fair for the longer term'.

“When entering into negotiations, confidence that agreements will be honoured is essential. This move, made in the first few days of the new Parliament, sends worrying signals about the government's readiness to honour agreements reached in good faith.”

The Treasury is consulting on the cap and will seek views, including from unions, on its scope and implementation.

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