Redundancy terms for States staff ‘unrealistic’

High costs of compulsory redundancy payments for States staff – potentially as much as twice annual salary – could be damaging efforts to reduce the size of the public sector, it has been claimed.

Deputy Simon Vermeulen is now the political leader of the Guernsey Party. (31715150)
Deputy Simon Vermeulen is now the political leader of the Guernsey Party. (31715150)

On the eve of the major debate on tax rises and States finances, Deputy Simon Vermeulen said the agreement was an example of unrealistic terms and conditions which the States could not afford.

‘Six months’ redundancy is quite normal, but this is beyond the pale,’ said Deputy Vermeulen. ‘We can’t be providing very expensive benefits which just don’t exist in other workplaces.’

A formal document on redeployment and redundancy, issued by the States to staff in September 2021, details the right to severance payments worth up to 100 weeks’ pay for employees affected by compulsory redundancy. The agreement entitles staff to five weeks’ pay for each year of continuous service subject to maximum service of 20 years.

Guernsey has no redundancy payment law covering all employees. Many employers in the private sector offer around 10 weeks’ pay.

Some generous schemes provide up to six months’ pay for long-serving staff made redundant – four times less than the maximum payment to States’ staff, according to the 2021 document.

‘These are overly generous terms and conditions,’ said Deputy Vermeulen, now the political leader of the Guernsey Party.

‘I haven’t come across redundancy terms like these. I have heard of one case like this in the whole of my career. As a rule, redundancy payments in the private sector are nowhere near this level.’

Deputy Vermeulen said the States’ compulsory redundancy terms should be known ahead of tomorrow’s debate on proposals to raise taxes by some £50m. a year.

‘I’d say the timing is important. This information should be published. The public should know. Politicians should know. We can’t keep giving away stuff we can’t afford,' he said.

‘But I’m not surprised. I see things like this which need to be changed and efficiencies which need to be made. When we say there are savings opportunities, here we are.’

In a letter published in today’s Guernsey Press, Guernsey Party adviser David Piesing speculated that efforts to reform the public sector may have been frustrated by rules on compulsory redundancy payments.

‘One of the main purposes of the public sector reform workstream is to make government more efficient and save money,’ said Mr Piesing.

‘But if the size of any resulting redundancy cost pill has been made far too big for any P&R to expect taxpayers to swallow, then change will never happen, and inefficiencies will remain embedded in the system.’

The States was approached for comment but was unable to respond before the Guernsey Press went to print.

It is understood that between 2017 and 2020, seven States staff who were made redundant received redundancy payment a worth more than six months’ salary, and one received a severance package worth more than six months’ salary.

In the civil service in the UK, rules agreed in 2010 mean that staff taking voluntary redundancy or exit are entitled to one month’s salary for every year worked, up to a cap of 21 months’ pay.

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