Published 08/07/10

The new coalition government has announced a proposal for tough new caps on the severance payments for civil servants and public sector workers. The intention being to bring public sector redundancies more in line with those offered in the private sector.

This comes after figures released showed that 15,000 civil servants have been made redundant over the last three years at a cost of £1.8 billion in redundancy payments. With the government claiming that the average payment is in the region of £60,000.

It has been estimated that the proposals coming out of Whitehall could affect up to 600,000 local authority employees.

Presently redundancy payments are calculated according to the length of employment and payouts can be up to three times the average salary of a worker. In the private sector payouts are on average set at a maximum of just one years salary.

The government is gearing up for negotiations with the unions as the proposed new scheme would require parliamentary legislation. However they are confident that by offering concessions to the unions they can push through any changes.

They proposed new redundancy terms will not apply to the lowest paid workers.

It’s also being reported that some Unions are already threatening to ballot their members on strike action. The leadership of both the Public and Commercial Services and Prospect unions are said to be unhappy with what is being offered and are asking for talks and negotiations.

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