Union anger at government move to cap civil servants' redundancy pay-offs

THE government yesterday announced that legislation is to be introduced as soon as possible to cap redundancy payments to civil servants.

Cabinet Office minister Francis Maude said the decision to legislate, which infuriated trade unions, had been taken "with reluctance", but it had become necessary because of the economic climate. A bill will be introduced to limit the cost of future payments by capping all compulsory redundancy pay-offs at 12 months' pay and limiting amounts for voluntary severance to 15 months' salary.

Many civil servants are entitled to three years pay if they apply for voluntary redundancy. Some long-serving public servants can be entitled to six years' money - meaning a senior civil servant earning 58,200 would receive almost 350,000.

In the private sector, statutory pay-offs mean employees aged between 22 or 41 may get one week's pay for each full year of service. Some firms offer a more generous package, but pay-offs of more than six months full salary are rare in the private sector. Unions attacked the ministerial announcement as "unlawful and undeserved" and raised the threat of legal and industrial action, which could herald a summer of discontent.

Public and Commercial Services union leader Mark Serwotka said: "If ministers are determined to make low-paid public servants pay for a crisis caused by bankers and traders, we will use all the means at our disposal to fight back."

Mr Maude said that by the year 2020, the civil service must become smaller and more efficient, providing the best value for money.