A controversial cut to redundancy payments for civil servants has been successfully challenged in the high court, leaving the government open to hundreds of claims for compensation.
The civil service compensation scheme was slashed by ministers in November, reducing redundancy pay and early access to pensions for thousands of public sector workers.
But a judicial review of the changes ruled on Tuesday that the cuts were unlawful because the Cabinet Office failed to consult with a trade union.
The ruling is expected to leave the government open to legal challenges from hundreds of public sector workers who have accepted the reduced terms. It is a blow for Theresa May’s government, which has been under fire for refusing to lift the public sector pay cap.
The public sector union PCS, which has more than 160,000 civil service members, was unhappy with the new scheme and mounted the judicial review in February following advice that the CSCS changes were unlawful. It was heard in the high court on 4 and 5 July 2017 by Lord Justice Sales and Mrs Justice Whipple.
“We feel this ruling is very clear,” said a PCS union spokesman. “We would like this scheme to be quashed.”
He added: “Whether the government wants to begin consultation again is a matter for them.”
The union claimed that there had been a failure to consult with employees’ representatives; unlawful interference with “possessions”; and a failure to comply with the public sector equality duty.
Counsel for the Cabinet Office claimed the outcome would not have been affected if the union had been allowed to participate.
The main changes of the imposed terms were to cut the tariff for calculating payments from one month’s salary for every year of service to three weeks; cut the cap for voluntary redundancy and voluntary exit from 21 months’ salary to 18 months; and cut the cap for compulsory redundancy from 12 months’ salary to nine months.
It meant that a civil servant with 30 years’ service and paid £30,000 per annum would have been entitled to a redundancy payment of £52,500, but after the change would receive £45,000 - a 14% reduction.
A civil servant with 20 years’ service and paid £15,000 a year would have been entitled to £38,333 in redundancy, but after the imposed change would receive £28,161 – a 27% reduction.
The coalition government first attempted to implement the changes in 2010 and issued fresh consultations last year.
In June 2016, the Cabinet Office wrote to the unions proposing further talks but stating: “Those unions engaging in the talks have accepted that the proposal above will form the basis of a reformed, negotiated, set of arrangements that their relevant executives can recommend acceptance to their members in any ballot.”
The CPS, Unite and the Prison Officers’ Association refused to get involved in the talks, leading to the judicial review.
A cabinet office spokesperson said: “The government is carefully considering the judgment and intends to appeal.”
