Ministers and unions collide over redundancy cap for civil servants

Posted 06/07/2010

Unions across the UK have reacted angrily to announcements that ministers intend to cap redundancy pay for civil servants.

Cabinet Office minister Francis Maude said that the government wants to introduce measures soon which would see such employees have their redundancy payouts cut to one year’s pay, or 15 months if they take voluntary redundancy.

He insisted that the current system – which can result in people who lose their jobs getting a payout worth six years’ salary – is “out of kilter” with the private sector and must be changed if the government is to rein in its spending.

Mr Maude also said the coalition may introduce regional pay bands for civil servants.

However, union representatives have warned they may resort to strike action if the proposals go ahead.

Under current employment law, managers must always consult with employees whom they intend to make redundant and must use a fair and objective way of making job cuts.

If this does not occur, those affected may have a case for unfair dismissal.