Capping the size of public sector exit payments—the revoked 2020 regulations
Capping the size of public sector exit payments—the revoked 2020 regulations

The following Employment practice note provides comprehensive and up to date legal information covering:

  • Capping the size of public sector exit payments—the revoked 2020 regulations
  • Overview of the 2020 Regulations
  • Effect of the cap on existing contractual entitlements
  • To which public sector bodies the 2020 Regulations apply
  • Authorities not in scope
  • Other sources of guidance
  • Application to newly-formed bodies
  • Meaning of ‘exit payment’
  • Payments exempt from restriction
  • Statutory redundancy pay (or its equivalent) cannot be reduced
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: Brexit and IP completion day—implications for employment lawyers.

This Practice Note sets out the workings of the Restriction of Public Sector Exit Payments Regulations 2020 (2020 Regulations), SI 2020/1122, now revoked. The 2020 Regulations came into force on 4 November 2020. The government announced on 12 February 2021 after only four months that the 2020 Regulations were to be revoked, and a Treasury Direction disapplied the cap from 12 February 2021 until the Regulations were officially revoked, by the Public Sector Exit Payments (Revocation) Regulations 2021, SI 2021/197, with effect from 19 March 2021. Public sector exit payments will have been made whilst the statutory exit pay cap applied, and therefore the details of the 2020 Regulations continue to be of relevance.

For details of the history of the proposals and legislation to cap exit payments in the public sector, including the background to the 2020 Regulations, see Practice Note:

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