Q&As

In relation to the law restricting the size of public sector exit payments, and the exemption for payments in lieu of notice (PILON) that do not exceed one quarter of an individual’s annual salary, where an individual’s PILON is more than a quarter of their annual salary because their notice period is longer than three months, does that mean the entire notice payment is excluded from the exemption, or only the portion of it that exceeds a quarter of their annual salary?

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Published on LexisPSL on 09/12/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • In relation to the law restricting the size of public sector exit payments, and the exemption for payments in lieu of notice (PILON) that do not exceed one quarter of an individual’s annual salary, where an individual’s PILON is more than a quarter of their annual salary because their notice period is longer than three months, does that mean the entire notice payment is excluded from the exemption, or only the portion of it that exceeds a quarter of their annual salary?

The Small Business, Enterprise and Employment Act 2015 (SBEEA 2015) and the Restriction of Public Sector Exit Payments Regulations 2020 (RPSEP Regs 2020), SI 2020/1122 place a cap (exit payment cap)—currently £95,000—on the level of public sector termination payments when they are made.

The RPSEP Regs 2020, SI 2020/1122, should be read together with the enabling provisions of SBEEA 2015 (SBEEA 2015, s 153C(1), (5)), the Exit Payment Cap Directions 2020 and the Guidance on the 2020 Regulations, issued by HM Treasury

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