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Photos: Tony Miles

UK: The first details of the Special Voluntary Severance Scheme that will be offered to railway employees have been outlined as the Department for Transport pushes forward with a widespread reduction in staff numbers across all parts of the rail sector.

Insisting that the scheme has been designed to help avoid any compulsory redundancies, the Rail Delivery Group has already held discussions with the principal trade unions ahead of its launch; participating organisations included ASLEF, RMT, TSSA and Unite.

‘Profound and lasting impact’

In its introductory document, DfT recognises that ‘Britain’s railway and rail workers have played a critical role during the pandemic. The work we’ve all done to keep those who have had to travel moving has been central to the UK’s response to the crisis. We should be proud of the contribution each of us has made.’

Nevertheless, it points out that ‘the pandemic has had a profound and lasting impact on so many aspects of our world. Passenger expectations and behaviours have changed, and even as we work hard to win customers back to the railway, passenger numbers are not expected to return to pre-Covid levels for some time.

‘Taxpayer support has helped minimise the impact on the industry, but this has been at a significant cost, and we know this can’t continue indefinitely. This, and the changes in passenger behaviours, will inevitably lead to changes in how the railway works and is structured as we address the funding gap across the industry. Rail employers are able to offer a discretionary and time limited opportunity, through this scheme, to individuals who may wish to leave the industry. It is an opportunity, but it is entirely up to you whether you want to pursue it.’

While there is as yet little overall clarity over which sectors of the workforce will be targeted, Network Rail is expected to take the lead in rolling out the programme ahead of the train operating businesses. ‘Initially the scheme will be open to employees in specific areas’, the launch document notes. ‘Each employer will advise their employees about who is eligible to participate in the VSS scheme. The scheme will not be made available to everyone or all at the same time.’

Open for a limited time, VSS severance payments are to be calculated based on a number of weeks’ pay depending on an employee’s continuous length of service, with the sums offered being based on completed years of employment.

Calculation consternation

There will be a minimum payment of £4 000 for anyone with more than one year of service, and employees are reminded that ‘a week’s pay does not include, for this purpose, additional payments like overtime, allowances, rest day working or bonus payments’. This is understood to have already caused some consternation as a number of employees receive routine bonus payments or allowances which are seen as part of their overall remuneration.

Other payments will be made in lieu of notice and usual adjustments will be made for holiday taken or owed. The VSS document adds that ‘up to £30 000 of the VSS payment could be paid tax free, subject to HMRC guidelines. Any VSS payment above £30 000 will be subject to tax and national insurance contributions’.

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The coronavirus crisis saw trains continue to run for essential journeys as passenger numbers collapsed, with the government now seeking ways to mitigate the financial impact.

The document then looks at benefits offered as part of a pay package. ‘Those with safeguarded travel (dating from before 1996) will retain the benefits in accordance with the standard industry rules on severance’, it states. ‘Other travel benefits will be subject to individual company policy.’

Potential applicants are warned that ‘you cannot re-join the company or other companies within the owning group within two years of your leaving date. It is not expected that individuals will return in the capacity of a contractor or worker contracted to your current company through a third party either for the same two-year period.’

Rail Business UK understands that some groups of employees, such as drivers and fleet maintenance staff, have already been informed that they are unlikely to be successful in applying for VSS, as these disciplines are already facing skills shortages. As the scheme is time-limited, the roll-out process is expected to move rapidly. At one train operator, staff going on holiday were advised to take their work phones with them in case their employer needed to update them at short notice.

Mixed reaction

Looking at the scheme overall, an RDG insider told Rail Business UK that ‘the rail industry has an older than average workforce and there may be some who think it will be time for a change of job or who want to take early retirement’.

However, initial feedback from staff suggests that some younger employees are not seeing the sums on offer as high enough to encourage them to leave, while others with many years of service were expecting to be offered more. The VSS calculations limit the length of continuous employment to 35 years, whereas older staff who joined the railway at a very young age expected their length of service to be better recognised.