Under existing Whitehall rules, some civil servants are entitled to severance payouts worth as much as six years’ salary. Ministers want to shrink those packages to bring them in line with the private sector, where workers who are made redundant typically receive the equivalent of a few months’ or even weeks’ pay.

Given that public sector salaries are on par with private, pension arrangements notably more generous, there\’s really no reason why redundancy should be so much higher.

Especially since a private sector company that is really crocked goes bust….at which point the workers get only statutory redundancy, no more. And going bust isn\’t something that happens to government departments. Not in law, anyway.

9 thoughts on “Good”

  1. Err, it’s simpler than that.

    Redundancy payments for current staff should remain at their current level, irrespective of whether that makes wider economic sense, because that’s what people signed up for when they took the job. It’s the same as private sector employers bailing out their pension schemes – whether or not it was a good idea to guarantee that amount of money 20, 30 or 40 years ago is irrelevant, the pensions still need paying because that was the deal.

    For *newly hired* staff, you are of course right.

  2. I agree with john – you can’t go around breaking contracts (unless those contracts were not validly entered into, eg Labour’s scorched earth behaviour).

    Of course, the contractual details for pension schemes are complex. Plenty of employers have been able to freeze pension schemes for existing employees. I wonder precisely what is contractual on pensions and redundancy?

  3. Didn’t the government (the last one) get a bloody nose in court for not getting the agreement of the PCS union to tinker with pensions?

    Seems to me that all the govt needs to do is get the ‘fat cat’ union bosses onside in order to advance their aims…

  4. So we can ride roughshod all over the implicit contract built into state pensions (to pay pension from age 65/60), but we must honour the implicit contracts in state employees’ terms and conditions? I’m presuming here there’s nothing on a bit of paper that actually says “if we want to fire you we will pay you six years’ worth of salary in return”

  5. ” the implicit contract built into state pensions (to pay pension from age 65/60)”: but everyone knew that the OAP was introduced at 70/70, then was changed to 65/65 and then was changed again to 65/60. So why would anyone infer that it would never be changed again?

  6. “So why would anyone infer that it would never be changed again?”

    A party to a contract can voluntarily enhance the terms it is offering. It cannot, generally speaking, voluntarily reduce the terms. That’s the difference between the reductions in pension age you highlight and the proposals to raise the pension age now.

  7. but we must honour the implicit contracts in state employees’ terms and conditions?

    Explicit, isn’t it? Superannuation Act 1972, as Serowtka has been insisting? Although I’ve skim read it and can’t see the actual provisions on numerics, so I assume they’re in the SIs s24(5) refer to.

  8. The Pedant-General

    “So we can ride roughshod all over the implicit contract built into state pensions (to pay pension from age 65/60), but we must honour the implicit contracts in state employees’ terms and conditions? ”

    Except of course that it’s nothing like a voluntary contract at all: neither you nor your employer have the option to decline to pay NI contributions.

    Oh – wait. NI contribs aren’t entirely linked to the pension either….

Leave a Reply

Your email address will not be published. Required fields are marked *