I am pleased to announce the severance package for the estimated 1,500 MOD civilians in Northern Ireland being made redundant during the period 1 August 2006 to 31 December 2008, as a result of the process of normalisation.
The House will recall that when I announced the package for the Royal Irish (Home Service) (R IRISH (HS)) on 9 March 2006, Official Report, column 961 I explained that a process of consultation would take place with the trades unions on the civilian redundancies in accordance with our duties under Section 188 of the Trades Unions and Labour Relations (Consolidation) Act 1992. That consultation has now been concluded and the redundancy package has been decided.
First of all, I would like to take this opportunity to pay tribute to the dedication and commitment shown by MOD civilians in Northern Ireland over many years in supporting the armed forces, and in helping bring about the enabling environment for the current security normalisation programme. While normalisation is good news for Northern Ireland, it also brings substantial change for our civilian work force and my Department has been working hard to draw up an enhanced redundancy package for those affected. I am now in a position to provide details of that package.
In addition to the normal occupational redundancy package (which, for the majority, will be compulsory terms under the Civil Service Compensation Scheme (CSCS)), affected staff will receive a flat rate financial recognition award (FRA) payment of £14,000 gross.
The payment is being made, in recognition of a unique set of circumstances, to MOD civilians based in Northern Ireland, and are a combination of the following factors:
The pressures and restrictions arising from their association with the armed forces in Northern Ireland, which they experienced while working for MOD and are likely to continue to affect them in the immediate aftermath of being made redundant;
The difficulties they may experience as a result of normalisation and directly arising from their former association with the armed forces in Northern Ireland; and
The effect of those pressures being exacerbated by the fact that the whole of the R IRISH (HS) is being disbanded, affecting over 3,000 individuals and nearly 50 per cent. of the civilian workforce are losing their jobs over a compressed timescale.
In summary, during the period 1 August 2006 to 31 December 2008 MOD civil servants made redundant through the process of normalisation will receive:
Redundancy compensation under the terms of their occupational redundancy scheme;
Access to the MOD outplacement service for a period of 12 months (an increase over the normal 6 months);
A re-training allowance of up to £1,000 per person, and
A flat rate additional payment of £14,000 gross.
The package, which goes significantly beyond statutory entitlements, is well deserved and we hope will be well received by MOD civilians in Northern Ireland. To put this into context, typically an individual who is aged 50 or over and made redundant between 1 August 2006 and 31 December 2008 will receive the immediate payment of an enhanced pension (and a tax free pension lump sum for those in the 1972 section of the Principal Civil Service Pension Scheme (PCSPS)), redundancy compensation of up to six months pensionable pay and the FRA of £14,000. To give examples, a 51-year-old band C with an average salary of £26,167 and 31 years service will receive a lump sum payment of £27,084 (this is the redundancy compensation and the FRA), in addition they will receive their pension lump sum of approximately £30,419 and an annual pension; a 54-year-old B and E/skill zone 3 with an average salary of £17,975 and 34 years service will receive a lump sum payment of £22,987 (this is the redundancy compensation and the FRA), in addition they will receive their pension lump sum of approximately £25,136 and an annual pension. Those staff under age 50 and made redundant in the same period will typically receive a preserved pension payable at age 60, redundancy compensation up to three times their annual pensionable pay and the FRA of £14,000. To illustrate, a 34-year-old band E/Skill zone 3 with an average salary of £17,975 and 16 years service will receive a lump sum payment of £43,958; a 27 year old band D/skill zone 4 with an average salary of £20,617 and 9 years service will receive a lump sum payment of £29,463. These lump sums are the combined totals of redundancy compensation and the FRA. Redundancy compensation and the FRA combined will be tax free up to the first £30,000 in accordance with the Income Tax (Earnings and Pensions) Act 2003.
This is a generous package for a unique set of circumstances for those MOD civilians in Northern Ireland made redundant between 1 August 2006 and 31 December 2008.