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Consultation on a Public Sector Exit Payment Cap

on Friday, 31 July 2020.

The Government has issued its response to the draft Restriction of Public Sector Exit Payments Regulations consultation.

The Regulations will introduce a £95,000 cap on exit payments and will affect all public sector employees.

Last year, we reported on the initial consultation. The response to that consultation from the Government is brief but confirms the following:

  • Implementation of the cap will apply across the whole public sector at the same time as opposed to being introduced in stages.
  • Payments for injury to feelings can be exempted from the cap.
  • The mandatory waiver for discrimination and whistleblowing claims will be extended to also include health and safety detriments and unfair dismissal claims.
  • The only part of any payment in lieu of notice that will be capped is the amount that exceeds a quarter of the individual's salary.
  • For the majority of payments, there will be no prescribed order in which payments in respect of an exit are to be capped. This will allow parties' discretion and flexibility to structure payments depending on individual circumstances.

Coronavirus guidance employers

The final versions of the regulations and guidance will be published at a later date (yet to be confirmed) and will include details on when the cap will come into force.

Need advice on exit payments? For more information, please contact Michael Halsey in our Employment team on 07554 432829, or complete the form below.

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