Claw-back of public sector exit payments
Claw-back of public sector exit payments

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

  • Claw-back of public sector exit payments
  • History and status of the claw-back legislation
  • To whom the claw-back regulations will apply
  • What types of payment may be clawed back ('qualifying exit payments')
  • What triggers the obligation to repay
  • Calculating the repayment
  • Duties of the authority that made the exit payment
  • Duties of the recipient of the exit payment
  • Duties of the authority to which the individual returns
  • Waiver of the requirement to repay exit payments

NB: This Practice Note discusses legislation that is not yet in force. Implementation of this legislation has been substantially delayed, and there is no current indication from Government as to when they will be implemented.

The current Government and the coalition Government that came before it have both expressed a desire to place controls on termination payments in the public sector.

There have been two separate but related legislative developments arising out of this.

The first of these was announced in the Queen's Speech in 2014, as part of the measures to be introduced by the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015). The (then coalition) Government's stated intention in introducing this first set of measures was to address the situation where a high earning public sector post holder left his or her post, receiving a sizeable termination payment, but then took a further public sector post, either immediately or within a short period of receiving the termination payment. These measures will allow for claw-back of part or all of the termination payment in those circumstances.

The relevant provisions in this first set of measures are sections 154 to 157, SBEEA 2015, which provide powers to make regulations designed to achieve these aims.

The claw-back provisions are discussed further in the remainder of this Practice Note.

The second set of measures were first conceived