The Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations (Northern Ireland) 2007

Citation, commencement and retrospection

1.—(1) These Regulations may be cited as The Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations (Northern Ireland) 2007.

(2) These Regulations shall come into operation on 12th March 2007 but shall have effect from 1st October 2006.

General interpretation

2.—(1) In these Regulations—

“the 1996 Order” means the Employment Rights (Northern Ireland) Order 1996(1);

“the 2003 Regulations” means The Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations (Northern Ireland) 2003(2);

“employment” includes office but does not include a period as a councillor(3);

“Pension Regulations” mean the Local Government Pension Scheme Regulations (Northern Ireland) 2002(4);

“Scheme employer” means an employing authority and, in relation to any person who is a community or transferee admission agreement employee, his community or transferee admission body(5);

“Scheme member” means a person who is a member of the Local Government Pension Scheme constituted by the Pension Regulations;

“termination date” means the date on the final day of a person’s employment terminated in one of the circumstances set out in regulation 3(1)(a).

(2) Expressions not defined in paragraph (1) but used in these Regulations and in the Pension Regulations have the same meaning as in those Regulations.

Application of the Regulations

3.—(1) Subject to regulation 9(2), these Regulations apply in relation to a person—

(a) whose employment is terminated—

(i) by reason of redundancy;

(ii) in the interests of the efficient exercise of the Scheme employer’s functions; or

(iii) in the case of a joint appointment, because the other holder of the appointment has left it;

(b) who, on the termination date, is—

(i) employed by a Scheme employer; and

(ii) eligible to be a Scheme member (whether or not he is such a member) or would be so eligible but for the giving of a notification under regulation 7 (leaving the scheme) of the Pension Regulations; and

(c) whose termination date is on or after the 1st October 2006;

and in the following provisions, “person” shall be construed accordingly, unless the context indicates that it has a different meaning.

(2) Where an additional requirement is specified in any provision of regulations 4 and 5 in relation to a person, that provision does not apply in relation to him unless he satisfies that additional requirement.

Power to increase statutory redundancy payments

4.—(1) Compensation may be paid in accordance with this regulation to a person who is entitled to a redundancy payment under the 1996 Order on the termination of his employment.

(2) The amount which may be paid must not be more than the difference between—

(a) the redundancy payment to which he is entitled under Part XII of the 1996 Order(6); and

(b) the payment to which he would have been entitled if there had been no limit on the amount of a week’s pay used in the calculation of his redundancy payment(7).

(3) The power to pay compensation is exercisable by the Scheme employer by which he is employed immediately before the termination date.

Discretionary compensation

5.—(1) This regulation applies where a person—

(a) ceases to hold his employment with a Scheme employer; and

(b) in respect of that cessation may not count an additional period of membership under regulation 54 (power of employing authority to increase total membership) of the Pension Regulations(8).

(2) Where this regulation applies, the Scheme employer may, not later than six months after the termination date, decide to pay compensation under this regulation, and in that event shall, as soon as reasonably practicable after the decision, notify the person in whose favour it has been made, giving details of the amount of compensation.

(3) The amount of compensation must not exceed 104 weeks’ pay.

(4) Chapter IV (a week’s pay) of Part I (introductory and interpretation) of the 1996 Order shall apply for the purpose of calculating a person’s week’s pay as it applies for the purpose of calculating redundancy payments but—

(a) with the same substitution for references to the calculation date of references to the termination date; and

(b) without the limit on a week’s pay imposed by Article 23(1) of that Order.

(5) In calculating compensation under this regulation the Scheme employer shall exclude any years of qualifying employment which that Scheme employer or any Scheme employer has taken into account when calculating compensation already paid under these Regulations or any other regulations made under Article 19 of the Superannuation (Northern Ireland) Order 1972, other than years of concurrent qualifying employment.

(6) If the person in whose favour a determination under paragraph (2) has been made receives a redundancy payment under Part XII of the 1996 Order or compensation under regulation 4, the equivalent amount shall be deducted from the compensation otherwise payable to him under this regulation.

(7) Compensation payable under this regulation shall be paid by the Scheme employer, as soon as practicable after the decision under paragraph (2), in the form of a lump sum.

Policy statements

6.—(1) Each Scheme employer must formulate, publish and keep under review the policy that it applies in the exercise of its discretionary powers under regulations 4 and 5.

(2) If the Scheme employer decides to change its policy, it must publish a statement of the amended policy and may not give effect to any policy change until one month after the date of publication.

(3) In formulating and reviewing its policy the Scheme employer must—

(a) have regard to the extent to which the exercise of its discretionary powers (in accordance with the policy), unless properly limited, could lead to a serious loss of confidence in the public service; and

(b) be satisfied that the policy is workable, affordable and reasonable having regard to the foreseeable costs.

Payments and repayments

7.—(1) Any compensation payable is payable to or in trust for the person entitled to receive it.

(2) Where any compensation is paid in error to any person—

(a) the Scheme employer must, as soon as possible after the discovery of the error—

(i) inform the person concerned, by notice in writing, giving details of the relevant calculation;

(ii) where there has been an underpayment, make further payment;

(iii) where there has been an overpayment, specify a reasonable period for repayment;

(b) a person who has received a notice under sub-paragraph (a) must repay any overpayment within the specified period; and

(c) the Scheme employer may take such steps as they consider appropriate to recover from the person to whom it was paid any overpayment which has not been repaid within the specified period.

(3) The Scheme employer shall take into account the person’s circumstances (so far as known or reasonably ascertainable) before taking steps under paragraph (2)(c).

Finance

8.  The cost of any payment to be made under these Regulations must not be met out of the pension fund maintained under the Pension Regulations.

Revocation of Regulations, transitional provision and savings

9.—(1) The following are revoked but subject to the transitional provision in paragraph (2) and the savings in the Schedule—

(a) the 2003 Regulations; and

(b) regulation 5 of the Local Government Pension Scheme (Civil Partnership) (Amendment) Regulations (Northern Ireland) 2006(9).

(2) A Scheme employer may decide to pay compensation under the 2003 Regulations to a person whose employment commenced before 1st October 2006 and whose termination date is after 30th September 2006 and before 1st April 2007.

(3) A Scheme employer may decide to pay compensation under regulation 5 to a person—

(a) whose employment with them terminated after 30th September 2006 and before the date on which these Regulations come into operation; and

(b) in respect of whom a decision to pay lump sum compensation has been made and notified under Part III of the 2003 Regulations before the date on which these Regulations come into operation (“the 2003 lump sum”).

(4) The amount that a Scheme employer may decide to pay under paragraph (3) may not exceed the difference between—

(a) 104 weeks’ pay; and

(b) the 2003 lump sum;

but if the person in whose favour a decision under paragraph (3) has been made receives a redundancy payment under Part XII of the 1996 Order or compensation under regulation 4 of the 2003 Regulations or regulation 4 of these Regulations, the equivalent amount shall be deducted from the compensation otherwise payable to him under paragraph (3) if no such adjustment has already been made.

(5) Nothing in these Regulations shall place any individual who is eligible to participate in the benefits for which the 2003 Regulations provide in a worse position than he would have been in if all the provisions of these Regulations had been framed so as to have effect only from the date of their making.

Sealed with the Official Seal of the Department of the Environment on 16th February 2007.

J Ritchie

A senior officer of the Department of the Environment