Public sector exit payments - action required by employers

17 October 2016

17 October 2016

Following the consultation response government expects departments to begin work to produce proposals for reform for each workforce by the end of 2016.

The stated aim of the consultation response is to make public sector exit terms fairer, more modern and more consistent.

The major workforces covered by existing statutory compensation schemes and other contractual exit arrangements are expected to begin reforms immediately, informed by the details below. These are the: Civil Service, NHS, Local Government, Teachers, Police, Firefighters and (taking account of the unique nature of the occupation) Armed Forces.

Chapter 5 of the consultation response outlines the ‘Process and timeline for reform’:

5.1 Consistent with the government’s view that it remains appropriate for the detail of exit arrangements to be negotiated at workforce level, departments responsible for the workforces will take forward the detailed design and analysis of proposals for exit payment reform, within the overall framework and principles for reform set out in this document.

5.2 Following the publication of this document the government expects departments to begin work immediately to produce proposals for reform for each workforce that are consistent with the terms set out in this document and with the government’s principles for reform.

5.3 As set out above, the government will consider the case for applying elements of the framework flexibly on a workforce by workforce basis. Examples of where the government may consider there is a case for flexibility may include where it can be demonstrated that a particular option may not lead to significant cost savings; where there is an alternative approach that may deliver commensurate cost savings; or where workforce demographics mean that a particular option may have unwarranted equalities or other workforce impacts.

5.4 The government expects departments to put forward proposals for reform within three months of the publication of this government response. Departments should then consult on proposals as appropriate and should follow the normal process of discussions and negotiations with Trade Unions and other workforce representatives in order to seek agreement to their reform proposals. The government expects this discussion process to be concluded, agreement reached and the necessary changes made to compensation schemes and other arrangements within nine months of the publication of this response.

5.5 Should it not be possible to achieve meaningful reform for one or more workforces, the government will consider options for primary legislation to take forward reform.

Geographical extent

Chapter 6 outlines the position for devolved administrations:

6.1 In both the exit payment recovery and exit payment cap reforms, the government position has been that the reforms would apply to those areas which are the responsibility of the UK government. It would be for the Scottish government, Welsh government and Northern Ireland executive to determine if and how they wanted to take forward similar arrangements in relation to devolved bodies and workforces.

6.2 The government will take the same approach to cross-public sector exit payment reform. It will be for the Scottish government, Welsh government and Northern Ireland government to decide individually whether each should set a framework, with a view to seeking agreement on revised exit terms for devolved workforces. Should the government ultimately decide that primary legislation is required in taking forward further reforms, the UK government would request Legislative Consent Motions from the Devolved Administrations where appropriate, which would give the relevant Administration the option of including devolved workforces and schemes under any legislation the UK government brings forward.

6.3 However, if and when a Legislative Consent Motion is required, it would be for the Devolved administrations themselves to decide whether this is a desirable approach.