The UK Government has launched a consultation exercise over plans to modernise public sector redundancy rules.
The Government says that its proposals will reduce the cost of pay-outs and ensure greater consistency between workforces across the public sector.
Currently, redundancy payments vary across the public sector, even for people with similar levels of pay and length of service. The proposals in the consultation will put pay-out terms between different workforces on a more equal footing, ensuring a fairer deal for public sector workers.
Research has indicated that redundancy pay is higher in the public sector and so the new rules also aim to align currently generous public sector redundancy payments with those available in the wider economy. Between 2010-11 and 2013-14, redundancy pay averaged £12,700 in the private sector compared to £15,800 in the public sector.
The changes will apply to all major workforces such as the Civil Service, Teachers, NHS workers, local government workers, police offers and firefighters, and include:
- setting a maximum tariff to calculate exit payments at three weeks’ pay per year of service,
- capping the maximum number of months’ salary that can be used to calculate redundancy payments to 15 months,
- introducing a tapering element that will reduce the amount of compensation lump sum an individual is entitled to the closer they get to their retirement age,
- setting a salary cap for calculating exit payments which will be based on £80,000, and
- reducing the cost of employer funded pension top ups for early retirement as part of redundancy packages.
Contains public sector information licensed under the Open Government Licence v3.0.
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Source:
https://www.gov.uk/government/news/government-could-save-hundreds-of-millions-of-pounds-by-ending-public-sector-redundancy-give-away
https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/
