Lobbying by Prospect members puts redundancy compensation unfairness on MPs’ radars
Amendments to the Enterprise Bill to address unfairness in how the proposed cap on redundancy compensation will operate were defeated in the House of Commons on 8 March 2016.
However, MPs from all sides of the House praised Prospect members – not only for the quality of their representations on this, but also the work they do in the public interest.
Prospect deputy general secretary, Garry Graham said: “The lobbying efforts by Prospect members was clearly felt and will inform our efforts to seek improvements when secondary legislation and other measures are debated.
“This offers hope for protecting redundancy compensation in the future.”
The bill provides for regulations to cap redundancy compensation at a maximum of £95,000. This will impact on millions of employees, including tens of thousands of Prospect members.
Employees on low or moderate salaries could be hit because the cost of paying an unreduced pension to someone made redundant over minimum pension age is included in how the cap is calculated.
When the proposal was first announced, Priti Patel MP declared that “Crucially, those earning less than £27,000 will be exempted to protect the very small number of low earning, long-serving public servants.”
But in the debate, the minister said voters should not rely on the word of politicians when they make policy announcements and that what mattered was the Conservative party manifesto.
The manifesto said the Conservative party would “end taxpayer-funded six-figure payoffs for the best paid public sector workers.”
The Labour party and the Scottish National Party put forward two amendments that would have exempted employees earning less than £27,000pa from the measure and ensure that the value of the cap was maintained over time.
Garry Graham said: “The amendments fell, but the arguments made in debate by thousands of Prospect members have been heard and will help Prospect resist further attacks on redundancy compensation that the Treasury and the Cabinet Office are currently consulting on.
Impact on nuclear workers
A further amendment from the Labour party sought to exempt employees of a number of companies operated by the private sector from the cap.
Employees of Sellafield Ltd, Magnox Ltd, NNL, Springfields Fuels Ltd, LLWR Ltd, Dounreay Site Restoration Ltd, INS and AWE Ltd were surprised to find themselves in scope for this measure.
Labour MPs, particularly Albert Owen and Kevin Brennan, pointed out that applying the cap to employees of these companies was inconsistent with the manifesto commitment and it was unfair to unpick long-standing agreements that workers have honoured.
Prospect says the government does not know if doing so is practical, value for money or even legal.
The minister said it would be inappropriate to put exemptions on the face of the bill, but she would consider the companies’ position on a case-by-case basis.
Garry Graham added: “The amendment was defeated by 25 votes but the minister will be held to her word about evaluating the case for each of the companies listed in the amendment.”
You can find a full transcript of the debate in Hansard (from Column 169).