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The Public Sector Exit Payment Cap: The Latest News

It had been anticipated that the long awaited Public Sector Exit Payment Cap would come into force by around June 2017. However, the summer has now come and gone, and there is no news on when the payment cap will be implemented.

The Public Sector Exit Payment Cap: Background

The Enterprise Act 2016 (Commencement No. 2) Regulations 2017 came into force, by way of statutory instrument (SI 2017/70) , on 1 February 2017. Section 41 of that legislation inserted sections 153A, 153B and 153C into the Small Business, Enterprise and Employment Act 2015. Accordingly, the Government has had the necessary powers to implement the Public Sector Exit Payment Cap since the the 1st February 2017. It had been anticipated that it would be implemented within 9 months of the Government publishing its response to the consultation on the proposed reforms in September 2016. Hence, the reason why it was thought that the Public Sector Exit Payment Cap would be introduced by no later than June 2017.

Timetable

There have been no indications as to when the Public Sector Exit Payment Cap will finally be implemented

The Civil Service Compensation Scheme

The Government has also been looking to make cuts to the Civil Service Compensation Scheme. The main proposals were to reduce payments from 1 months pay for every years service to 3 weeks, to reduce the cap for voluntary redundancy/exit from 21 months pay to 18 months, and to reduce the cap for compulsory redundancy from 12 months pay to nine months. A framework had been agreed with some unions following consultations that had begun in February 2016, and the changes were introduced in November 2016. However, the Public and Commercial Services Union (PCS) had not been consulted, and they launched judicial review proceedings. This resulted in the High Court ruling in July 2017, that the proposed changes were unlawful on the basis that the Government had failed in its “duty to consult with a view to reaching agreement” (i.e. because unions such as the PCS, Unite and the Prison Officers’ Association had not been properly consulted).

The Government has begun fresh consultations

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