Victory for PCS in court over civil service redundancy pay

A High Court judge has dealt the final blow to the government’s unlawful cuts to civil service redundancy pay.

Mr Justice Sales confirmed today (18 June) the Public and Commercial Services union was right to challenge the way the terms of the civil service compensation scheme, which governs redundancy payments, were slashed.
The decision quashes an amendment to the scheme that the previous government had claimed was effective from 1 April, and requires the new government to enter into negotiations with PCS if it wants to change the scheme in future.
While the judge quashed the detrimental changes to the scheme, he retained elements - relating to protection against age discrimination - that provide improvements. The union says this shows it was not opposed to change on principle, but that any alterations had to be fair and agreed.
The union’s challenge, by way of a judicial review, was heard over two days in April and the judge ruled on 10 May that the previous government had acted unlawfully. Both sides were then given a few weeks to reach an agreement on the terms of an order to quash the amendment, but failed to do so, and the case went back to court for a final hearing on 9 June.
The union always maintained the changes to the compensation scheme would have made it easier and cheaper to cut tens of thousands of civil service jobs and privatise more of our public services.
PCS deputy general secretary Hugh Lanning said: “We are delighted with the ruling that proves our members were right to oppose the cuts that the previous government tried to force through.
“It’s rare for a High Court judge to side with a trade union, so we believe this vindicates our stance and our assertion all along that this was a grossly unfair attempt by the government to rip up the rights of its own workforce.
“The new government now has a golden opportunity to show it is truly committed to consultation and negotiation, by getting round the table with us to agree a new scheme that is fair and protects the rights of civil and public servants.”
Richard Arthur, head of trade union law at Thompsons Solicitors, who acted for PCS, said: “The ruling confirms that a government cannot simply change redundancy rights which have already accrued for civil servants without agreement by the unions.
“With the exception of some favourable age-related changes, all the benefits in the new scheme are quashed and all the benefits in the old one are protected. The new scheme that was imposed on civil servants was simply unlawful.”
The ruling comes days before the coalition government is expected to announce further cuts in public spending in its emergency budget next Tuesday (22 June).
PCS will hold events across the country on Tuesday, including outside the Treasury in Parliament Street in London between 12pm and 1pm, and will launch its Tax Justice and Jobs report that details how more than £120 billion is estimated to be lost to the economy every year through tax being evaded, avoided and uncollected.

TUC calls for at least £500 a week statutory redundancy pay

The TUC today (Friday) welcomed the increase in the amount of an employees’ weekly earnings which counts towards statutory redundancy pay from £330 to £350, which takes effect this Sunday (1 February).

Although the £20 increase will be welcome to the thousands of people who find themselves joining the dole queue each week, the £350 is still far lower in real terms than the original value of statutory redundancy pay when it was introduced in 1965. The TUC would like to see the weekly limit increase to at least £500 to provide a financial cushion for the newly unemployed.

Official statistics show that 46.2 per cent of UK employees earn more than £350 a week, so a significant amount of the workforce will still be losing out with a statutory limit of £350 for redundancy pay.

To ensure that workers are properly compensated when they lose their jobs, the TUC believes the Chancellor should increase the weekly limit on statutory redundancy pay to at least £500, to help restore the real value of the limit.

The current weekly rate severely limits the amount of redundancy pay available as the calculation, which is based on pay and length of service, ignores any weekly pay above £350.

To further assist those who have been made redundant, the TUC believes the amount that people receive in redundancy pay before they have to pay tax – frozen at £30,000 since 1989 – should now be increased to £50,000. This would have been the current level had the tax threshold increased in line with inflation.

Midlands TUC Regional Secretary Roger McKenzie said: “With unemployment soon due to exceed two million, more than 1,500 people a week are losing their jobs. Many will be facing redundancy and unemployment for the first time in their lives.

“There can be no assumption that the people who are losing their jobs will find it easy to get new ones, and they will need all the help they can get with redundancy pay, retraining and personal advice.

“They will also need resources to pay their housing and food bills.

“Many decent employers, especially those that recognise unions, already offer their staff more generous redundancy payments than the statutory limit. The statutory limit should be raised to reflect more closely the real cost to the individual of losing their job.

“Ministers must increase minimum redundancy pay to at least £500 a week and let people take up to £50,000 of their redundancy pay tax free.”

The TUC recently launched a package of support for workers who have been made redundant, or are at risk of redundancy or of losing their homes due to the economic downturn.

The package includes two new free booklets – Coping with the Economic Downturn and Facing Redundancy – as well as updated information about redundancies, how to use JobCentre Plus, how to look for a new job, and what training and benefits individuals are entitled to on www.worksmart.org.uk, the TUC’s website for people at work. The website not only has downloads of both leaflets, but also contains questions and answers on all aspects of redundancy.