New law on redundancy 'will lead to strikes'

Measures changing redundancy terms for civil servants will lead to increased strikes and legal challenges, ministers were warned last night.

Labour's John McDonnell claimed the Superannuation Bill was the "worst example of industrial relations practices" seen in years.

Mr McDonnell criticised what he said was the government's threat to impose severe caps on the redundancy terms for thousands of civil servants, who will lose their jobs as a result of the coalition's spending cuts.

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The bill will see civil servants receiving one month's salary for every year of service. This would be capped at 12 months for compulsory redundancy and 21 months for voluntary redundancy, with all civil servants entitled to a three-month notice period.

It would also see "significant protection" for lower-paid civil servants, with anyone earning less than 23,000 a year deemed to be on that figure when their redundancy payments were calculated.

Civil servants on more than six times the private sector median earnings - at present about 150,000 - would have their salary capped at that figure for redundancy payments, which ministers say will bring an end to the "mega-payouts" that had caused "offence to taxpayers".

Cabinet Office minister Francis Maude told MPs the government was "committed" to consultation with the trade unions.

He said a report on consultations between the government and the unions over future changes to terms and conditions for civil servants would be presented to parliament, following Lords amendments.

But Mr McDonnell said of the bill: "I can't think of any better mechanism for actually inciting industrial action than this.

"In my view this will result in not just industrial relations deteriorating, but will enhance the potential for legal challenges."

The bill now awaits Royal Assent.