The two largest Civil Service unions have lost their High Court challenge to a scheme which will reduce benefits paid to members on redundancy and early retirement.
The Public and Commercial Services Union, which has 270,000 members, and the Prison Officers' Association, which has a membership of 35,000, called for a judicial review of a December 2010 decision by the Minister for the Civil Service to amend the Civil Service Compensation Scheme, which applies to more than 600,000 public servants.
At a hearing last month, lawyers told Mr Justice McCombe that, because rights to certain redundancy terms had accrued through length of service, they were classed as a "possession" in human rights law and should not be "interfered with" unless there was an over-riding public interest.
But today, the judge, sitting in London, dismissed the claim and said the new scheme was valid.
He concluded that, while the benefits under the old scheme were possessions within the meaning of the European Convention, and the changes did amount to interference, this was justified.
He said: "First, the interference must be in accordance with law which itself must be accessible, precise and foreseeable in application.
"Secondly, the interference must be in pursuit of a legitimate aim in the public interest and, thirdly, it must strike a fair balance between the persons affected and the community as a whole.
"The individuals affected must not be required to bear a disproportionate or excessive burden."
The only question was whether the Minister had shown that the interference with scheme members' rights was a proportionate one within the limits of what could be afforded.
The judge said that he bore in mind that the scheme and payments made under it were designed to plug a gap between employments or between leaving the service and full retirement.
To this extent, they were "weaker" than pension rights which afforded financial protection for many years and into old age and had a transfer value, such as on divorce.
"Salary and pension benefits remain unaffected. The rights of scheme members have not been eliminated by the new scheme; they have been reduced in a manner designed to spread the burden fairly among all civil servants."
He said it was not contested that the new scheme, which was accepted by four unions, was still relatively favourable to departing employees when compared with statutory terms and the terms customarily on offer in the private sector and other public sector employments.
In his judgment, the reduction in benefits was "reasonable and commensurate" and the interference did not go beyond what was "reasonably necessary" to achieve the legitimate aim recognised on both sides - reduction of the national budget deficit.
Later, Hugh Lanning, deputy general secretary of the Public and Commercial Services Union (PCS), said: "We are pleased the judge agreed with our central argument that existing rights to redundancy pay should not be taken away without consent, but naturally disappointed he ruled he could not interfere in the Government's economic policies.
"We are taking further legal advice, but this case was only ever one strand of our opposition, and we are committed to carrying on the fight both industrially and politically."
PCS general secretary Mark Serwotka said: "Despite the ruling, it still cannot be right that low and modestly paid public servants are being forced to pay for the economic crisis with their jobs, their pay and their pensions.
"Our members were on strike on June 30 alongside teachers and lecturers, and we are talking to them and other unions about stepping up industrial action in the autumn if the Government refuses to halt its unnecessary and deeply damaging spending cuts."