Striking Civil Servants Need Bringing Back Down to Earth Over Golden Parachutes

Up to 270,000 civil servants are going on strike in response to plans to cap redundancy pay in a walkout organised by the Public and Commercial Services Union. The Union says its members could stand to lose a third of their entitlement under the new civil service compensation scheme, which will cap payments at £60,000 for those laid off or taking voluntary redundancy. To put things into perspective, civil servants are entitled to one month’s redundancy pay for every year worked. This compares very favourably indeed with the statutory entitlement operated by most private sector employers, which comprises a tiered age-based system of 0.5 to 1.5 week’s pay for each full year of service. At worst then, civil servants’ redundancy entitlement is more than two-and-a-half times more generous than most private sector employees, and at best it is eight times better!

PCSU claims it is taking action to protect its most vulnerable members (i.e. those earnings less than £20,000 per year); but under closer inspection, it is those on higher incomes that stand to lose the most. Anyone earning £30,000 or less is entitled to three years’ pay or £60,000, whichever is lower. For example, a worker with 20 years’ service behind them on a salary of £20,000 per year could end up with a lump sum payment of around £33,320 courtesy of the taxpayer. Indeed, 80% of all staff – those earning £30,000 or less – will receive payouts of between two and three years’ salary. These are insanely generous pay-offs under any set of circumstances; but in today’s climate, with the private sector having taken the brunt of the economic pain, they are obscene.

Apparently, fewer than one in five PCSU members voted in favour of strike action, which equates to around 10% of the civil service workforce. You can bet your bottom dollar that these lot are from the 20% of staff who stand to lose out because of the £60,000 cap (i.e. not the most ‘vulnerable’ portion of the workforce).

James Faulkner, WatsHot.com

N.B. I keep hearing the complaint that pay in the public sector is not as good as it is in the private sector. I don’t have time to investigate all the statistical nuances of the relationship between pubic and private sector pay, but in general public sector pay should more or less mirror the private sector at the unskilled level and then be gradually outdone towards the higher end of the spectrum. This has to be the case, otherwise the public sector would attract all the best talent and the private sector – and hence our ability to compete in the global economy – would be crippled. In other words, it is an economic necessity that the potential rewards for those working in the private sector outshine those on offer for their public sector counterparts. And then of course, there is the fact that lower average wages in the public sector are compensated for by, in general, better job security and better pension packages.