The coalition Government has suffered a setback to its plans to curb the cost of the public sector after the High Court threw out three attempts to cut civil servants’ redundancy pay.
The court ruled last month that Labour’s planned reform of the civil service compensation scheme, intended to save £500 million, was unlawful because it was a statutory scheme requiring trade union agreement for “detrimental changes to accrued rights”.
Lawyers for the then Government sought to argue that, despite the judgment, legal protection did not apply to voluntary redundancies, lump sums paid out to civil servants and extra benefits based on a qualifying period. But on all three counts, the court found for the Public and Commercial Services union.
PCS deputy general secretary Hugh Lanning said: “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.” He called on ministers to “get round the table” to agree new reforms.
Ministers will now have to seek approval of the six civil service trade unions – PCS, Unite, GMB, Prospect, the Prison Officers Association and the First Division Association – if they want to reintroduce the changes. However, the court ruled that one change relating to ending age discrimination could go ahead, as it was not detrimental.
Mr Justice Sales, who heard the case, said the Government could not selectively remove legal protection for parts of the scheme: “It is difficult to see any policy justification for distinguishing between protecting other accrued rights of civil servants and affording protection in relation to the accrued rights associated with the additional period earned by a civil servant”.
Although reform of the scheme was a Labour policy, its rejection is a defeat for the Cameron-Clegg coalition as it seeks to reduce public spending by an estimated £85 billion by 2015, according to the Institute of Fiscal Studies.
A Cabinet Office spokesperson said: “We are disappointed by today’s decision and the Government will announce its next steps after it has considered the terms of this final judgement. As the coalition programme for government states, we are committed to reforming the civil service compensation scheme, which is expensive, to bring it into line with practice in the private sector.” The Government has until August to appeal.
