Public Sector Redundancy Reform Plans

The Treasury has decided to push ahead with plans that would require highly-paid public sector workers to return some (or possibly all) of their redundancy payment if they return to work in the same part of the sector within a year. The proposed legislation would stop healthcare and local government employees from receiving taxpayer compensation, especially if they return to a similar role in a short period of time.

It was in the Queen’s Speech on 5 June 2014 that the government’s plan to limit excessive redundancy payments in the public sector was revealed. A consultation was then launched later in the month to see whether new rules were needed. The response to the consultation has been published by HM Treasury and the government has published its legislative proposals regarding the measure that would require redundant public sector employees earning over £100,000 to repay a broad definition of their exit payment if they are returning to a public sector role within 12 months.

Almost all of the public sector will be covered by the new regulations, except the army, Bank of England or public broadcasters.

Nick Barnett

Published on 31/10/2014