The Superannuation Bill completed its passage through Parliament yesterday, clearing the way for it to receive royal assent as early as tomorrow, and triggering the imminent imposition of a new civil service redundancy scheme by the Cabinet Office.

The bill imposes a cap on redundancy payments, limiting compulsory redundancy compensation to 12 months’ pay and voluntary redundancy to 15 months’. However, Maude intends to repeal the caps almost immediately and instead impose a more complex deal negotiated with – but not approved by – the civil service unions.

The arrival of the new scheme is likely to herald a spate of major departmental redundancy programmes, as senior civil servants put into action plans developed to meet the cuts imposed in the spending review. Speaking to Civil Service World just before piloting the bill through its last stages in the House of Commons, Cabinet Office minister Francis Maude said that departments should be able to “put schemes into effect early in the new year”. Given royal assent for the bill, he hopes that the new scheme will “come into effect on Wednesday” – the 22 December.

Maude’s new Civil Service Compensation Scheme is, he says, designed to protect lower-paid civil servants, limit payments to high-earners and incentivise civil servants to opt for voluntary redundancy. Under the scheme, voluntary redundancy payments can reach 21 months’ pay, and compulsory 12 months’. Low-earners’ payments will be calculated as if they earned £23,000, and high-earners’ pay will be capped at £150,000 for the purposes of calculating payments.

The unions are currently balloting their members on whether to accept the negotiated package, with the PCS union and Prison Officers’ Association (POA) advising their members to reject the plans, and the other members of the Council of Civil Service Unions (CCSU) recommending that they be accepted. Most of the unions’ ballots end later this week, with the PCS’s and POA’s closing on 14 January.

Even if some of the unions reject the scheme, they no longer have the right to veto it. One of the bill’s clauses removes the requirement that all CCSU members agree any changes to the compensation scheme – a requirement which allowed the PCS to win a judicial review of the negotiated settlement previously agreed between the other CCSU members and the last government. This clause, Maude told CSW, is essential because the judicial review “seemed to make it impossible to impose something without the agreement of all the unions. We needed to be in a position where we could cut [redundancy] costs”.

However, the PCS and POA are now considering mounting a challenge to the bill in the European Court of Human Rights (ECHR), on the basis that the clause infringes their members’ rights.

Speaking before the Commons vote, POA general secretary Steve Gillan told CSW that the union is “keeping its options open as to whether to go for a legal remedy”. A PCS spokesman has also told CSW that the union will fight the bill’s provisions in the ECHR.

Furthermore, the PCS says it will argue that changing redundancy terms threatens the “accrued rights” of civil servants, again infringing its members’ human rights. Gillan also said that the scheme “does affect accrued rights – that’s one of the reasons why we’re recommending rejection”. Last week, the Joint Committee on Human Rights suggested that the PCS might have a case in the ECHR. But Maude argues that “There isn’t a human rights issue here. We’re pretty clear that these [redundancy terms] aren’t possessions – and even if they are, that there’s a public interest big enough to gain exemption from any issues that might be raised.” 

During the Commons debate yesterday, left-wing Labour MP John McDonnell raised concerns over whether the revised scheme will resist legal attacks. “In terms of the legalities of the bill we’re entering into legal quicksand, which I think the government will regret,” he said. “The government is entering into an industrial relations minefield and an industrial morass.”

Nonetheless, other CCSU unions do not believe that an appeal to the ECHR will bear fruit. The deputy general secretary of the Prospect Union, Dai Hudd, told CSW: “We have had indications of what the legal case might be. Suffice to say, it was not strong enough to take that course.” He added: “There is no guarantee that even if the case was successful, compensation would be appropriate to the losses,” and told CSW that the human rights committee’s advice did not bear in mind that most civil service unions are likely to approve the new scheme.

On the options facing Maude if the unions refuse to accept the new compensation scheme, Hudd said that he might be tempted to enforce the caps contained within the Superannuation Bill. “Not that I would encourage him to use this,” he said, “but he would have an argument that he had made every attempt to reach a settlement.”

Asked whether European Court action will deter departments from implementing redundancy programmes, Maude said: “We’ve got to press ahead: there’s an urgent need to implement change in Whitehall.”

Written by Matt Ross and Joshua Chambers, CSW