PART 11Employment

Public sector exit payments

F1153ARegulations to restrict public sector exit payments

(1)

Regulations may make provision to secure that the total amount of exit payments made to a person in respect of a relevant public sector exit does not exceed £95,000.

(2)

Where provision is made under subsection (1) it must also secure that if, in any period of 28 consecutive days, two or more relevant public sector exits occur in respect of the same person, the total amount of exit payments made to the person in respect of those exits does not exceed the amount provided for in subsection (1).

(3)

An exit payment is in respect of a relevant public sector exit if it is made—

(a)

to an employee of a prescribed public sector authority in consequence of the employee leaving employment, or

(b)

to a holder of a prescribed public sector office in consequence of the office-holder leaving office.

(4)

An exit payment is a payment of a prescribed description.

(5)

The descriptions of payment which may be prescribed include—

(a)

any payment on account of dismissal by reason of redundancy (read in accordance with section 139 of the Employment Rights Act 1996);

(b)

any payment on voluntary exit;

(c)

any payment to reduce or eliminate an actuarial reduction to a pension on early retirement or in respect of the cost to a pension scheme of such a reduction not being made;

(d)

any severance payment or other ex gratia payment;

(e)

any payment in respect of an outstanding entitlement;

(f)

any payment of compensation under the terms of a contract;

(g)

any payment in lieu of notice;

(h)

any payment in the form of shares or share options.

(6)

In this section a reference to a payment made to a person includes a reference to a payment made in respect of that person to another person.

(7)

For the purposes of subsection (2), a public sector exit occurs when the person leaves the employment or office in question (regardless of when any exit payment is made).

(8)

Regulations may include—

(a)

provision which exempts from any provision made under subsection (1) exit payments, or exit payments of a prescribed description, made in prescribed circumstances;

(b)

provision which, in consequence of provision made under subsection (1), amends a relevant public sector scheme so as to make any duty or power under the scheme to make exit payments subject to any restriction imposed by regulations under subsection (1) (taking account of any relaxation of such a restriction which may be made under section 153C);

(c)

provision which makes an amendment of any provision made by or under an enactment (whenever passed or made) which is necessary or expedient in consequence of any provision made by or under this section.

(9)

Regulations may substitute a different amount for the amount for the time being specified in subsection (1).

(10)

Nothing in this section applies in relation to payments made by authorities who wholly or mainly exercise functions which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998).

(11)

In this section—

“enactment” includes an Act of the Scottish Parliament, a Measure or Act of the National Assembly for Wales and Northern Ireland legislation;

“prescribed” means prescribed by regulations under this section;

“relevant public sector scheme” means—

(a)

a scheme under section 1 of the Superannuation Act 1972 (civil servants);

(b)

a scheme under section 7 of that Act (local government workers);

(c)

a scheme under section 9 of that Act (teachers);

(d)

a scheme under section 10 of that Act (health service workers);

(e)

a scheme under section 1 of the Public Service Pensions Act 2013 (schemes for persons in public service);

(f)

a scheme under section 26 of the Fire Services Act 1947 or section 34 of the Fire and Rescue Services Act 2004 (fire and rescue workers);

(g)

a scheme under section 1 of the Police Pensions Act 1976 or section 48 of the Police and Fire Reform (Scotland) Act 2012 (members of police forces);

(h)

any other prescribed scheme (whether established by or under an enactment or otherwise).