Council responds to article published in the Fermanagh Herald under the headline ‘Council workers get £200k in golden handshake’

Published: 28th July 2017

On Wednesday 26 July 2017 the Fermanagh Herald published an article under the headline ‘Council workers get £200k in golden handshake.’

Fermanagh and Omagh District Council wishes to make it clear that this headline is misleading and as such would like to clarify the details of the application of the Review of Public Administration (RPA) Staff Severance Scheme within the Council.

The detail below has also been presented to provide additional information to the article, ‘£1.6m pay off bill for Council staff’ which was published in the Ulster Herald on Thursday 20 July 2017.

Payments made to employees through the RPA Staff Severance Scheme

–      21 employees who were entitled to a termination or severance payment left the employment of Fermanagh and Omagh District Council in the 2015/16 financial year.

–      The total cost of the severance packages was £1,600,000 (rounded to nearest £000). However, as some of these employees worked across a number of councils, £331,000 of the total cost was recovered from other councils. This resulted in a net cost of £1,265,000 to Fermanagh and Omagh District Council.

–      Under the RPA Staff Severance Scheme employees received a redundancy payment and for those aged 55 years and over the Council was required to make a payment to the Local Government pension scheme to invoke their pension benefits. The total cost of £1,595,872 is made up of £473,670 paid to the pension scheme and £1,122,202 paid to the employees concerned.

–      The average total cost per employee to the Council was £75,994 and the average severance payment to the employee was £53,438. In no case was the cost to Council per employee £200,000 as the article suggested.

–      The payments made to employees varied due to factors such as age, pay and length of service. The single largest cost for any employee was £177,931 made up of a payment of £74,728 to the pension scheme and £103,203 to the employee. The articles in the Fermanagh Herald and the Ulster Herald focussed on the highest costs and did not disclose that at the lower level the exit or severance payments for four employees was £25,181 in total.

Fermanagh and Omagh District Council fully disclosed these payments on page 14 of its audited and published financial statements for the year to 31 March 2016. A breakdown of the total cost is as follows:

Package Cost           Number of employees       Total cost per band

£0-£20k                                4                                        £25,181

£20k-£40k                            1                                         £36,942

£40k-£60k.                           4                                         £203,518

£60k-£80K                           4                                          £281,567

£80K-£100K                        1                                          £87,898

£100K-£150K.                     5                                          £619,823

£150K-£200K.                     2                                          £340,943

Total cost                                                                     £1,595,872      

of which £331k was recovered from other Councils. 

 

 Background to the RPA Staff Severance Scheme

–      The RPA Staff Severance Scheme for Local Government was agreed regionally by the Employers and Trade Union Side of the Local Government Reform Joint Forum.

–      The RPA Staff Severance Scheme was developed for councils to apply in cases where councils deemed it necessary to make staff redundant as a result of the Reform of Local Government. The Reform of Local Government saw 11 new councils replace the 26 District Councils on 1 April 2015. Fermanagh and Omagh District Council replaced the former Fermanagh and Omagh district councils respectively.

–      Given the scale of change it was inevitable that posts would be displaced and therefore termination or severance payments were unavoidable.

–      The RPA Staff Severance Scheme applied only to those employees whose posts no longer existed as a result of the Reform of Local Government and where no suitable alternative employment was available within the new Fermanagh and Omagh District Council.

–      Fermanagh and Omagh District Council sought expressions of interest for voluntary redundancy from employees whose positions no longer existed to avoid the likelihood of compulsory redundancy. This was to ensure the smooth transfer of staff to the new organisation.

–      The RPA Staff Severance Scheme was applied only in situations where all other options of employment had been exhausted and where the termination of employment met the criteria of being in the best financial and managerial interests of the organisation. The RPA Staff Severance Scheme therefore was applied as a means of last resort.

 

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