Immediately after the Brexit vote on June 24th, David Cameron said that he would stand down as Prime Minister. He intended to tender his resignation in the Autumn once his successor had been elected by Conservative Party members. But, as we know, his departure was brought forward.
As part of his departure process he dismissed his special advisers. And he proposed to pay those advisers four weeks’ pay for nine weeks’ loss. Many said that this was unfair. Here’s an analysis – and at the end we’ll ask you what you’d have done.
Special advisers and civil servants
Members of the Cabinet are supported by civil servants. They also employ ‘special advisers’ Normally civil servants are muzzled – they must behave impartially – but these individually employed ‘special advisers’ are encouraged, indeed expected, to develop opinion and advise their ministerial masters on complex topics such as the economy. As ‘special advisers’, they work for ministers, but unlike their main-stream Civil Service colleagues, they expect to be dismissed when the minister who employs them is replaced or resigns.
As soon as Cameron made his announcement, his advisers were then expecting to be made redundant in Autumn. But the linear progression from the announcement of intention to his actual resignation three months later took an unusual turn. Following the decision of leadership contenders to pull out leaving only Theresa May, the leadership race was abruptly brought to a halt and Theresa May announced winner. With a new leader elected, David Cameron resigned on 11 July some nine weeks earlier than expected.
As a result of Cameron’s early resignation, his special advisers found themselves redundant somewhat earlier than expected – in fact a whole nine weeks ahead of when they had likely been advised they would lose their jobs.
When an employer has no further ‘work of a particular kind’, they make employees doing that work redundant. Redundancy is a special form of dismissal. David Cameron had, all of a sudden, and certainly before he had intended, no need for his advisers and hence dismissed them immediately.
By way of background one should remember that when employees are dismissed, it takes them time to find a new job – and generally the more senior and specialist they are, the longer it takes. Redundancy payments are intended to compensate for the employees’ loss of earnings.
It’s so unfair!
A furore broke out in mid-July when Cameron announced that he wanted to give the advisers an additional months’ severance pay over and above the four and a half months’ pay they were due contractually. The CEO of the Civil Service said this was unacceptable. He argued that the advisers should only receive the four and a half months’ pay detailed in their contract of employment. The civil service unions joined the fray arguing that it was all so unfair on their members and on taxpayers, since the taxpayer would ultimately foot the redundancy bill.
So, what’s the issue? And who’s right?
As a manager, David Cameron found himself having to dismiss staff nine weeks earlier than expected. The advisers had expected to work until September. Now they were out on the street in July. As compensation, Cameron wanted to pay them an additional four weeks severance pay, over and above that which they could contractual expect.
So, did Cameron need to make an additional payment? And is it fair on others that this happens? Many said it was neither necessary nor fair.
When staff are made redundant in the UK, provided they meet certain criteria, they are eligible for statutory redundancy pay based on length of service and age. In the case of Cameron’s advisers, they were presumably appointed six years earlier when he took up office. Some firms also pay additional amounts to staff when they are made redundant. This is often referred to as ‘company redundancy pay’. In this case this was four and a half months pay.. Ex-gratia payments can also be made, over and above statutory redundancy pay and over and above anything contractually agreed. Ex-gracia payments are non-contractual; there is no obligation to pay and the payment is made as a gesture of goodwill.
In the case of the special advisers, had the leadership race gone to plan, the PM’s office would likely have entered into a redundancy consultation process with the advisers at least four weeks before they were likely to be made redundant (assuming that there are less than 20 advisers). Discussions would therefore be likely to begin in late August.
The additional payment of one month’s salary that David Cameron authorised is less than the number of weeks that the advisers would have been working had the leadership contest run its course. It’s less than the taxpayer would have paid had the advisers been paid normally, so in fact the taxpayer has saved money!
David Cameron pays special advisors more
So the employer started a process by which it would make its employees redundant in some nine weeks’ time. A severance payment would be due. Suddenly the employer announced that the employees were to be dismissed immediately – no notice was given. The issue is this: is it fair and reasonable that these employees are compensated by some ex-gracia payment for that nine weeks’ loss?
David Cameron said yes and proposed four weeks’ pay for nine weeks’ loss. We agree with him. What do you think? And what would you do if you were in Cameron’s position?
Redundancy’s complex. If you need help, then read our chart-topping white paper on Redundancy: Get it Right! Or call us today to discuss your specific redundancy circumstances.