Proposals on the recovery of public sector exit payments

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In the Queen’s speech of 2014, the Government announced that it intends to introduce new legislation to mandate the recovery of compensation, including redundancy payments, across the public sector when an individual takes new employment in the same public sub-sector (e.g. NHS or local government) within 12 months of receiving a compensation payment. These proposals aim to introduce a common position on ‘claw back’ of compensation payments across the public sector. 

During August and September 2014, the Government consulted on the details of how these proposals should be implemented before taking any final decisions in relation to the final content of the legislation.

The key points from the consultation paper are:

  • Recovery of exit payments are aimed at high earners (£100K+ threshold).
  • Secondary threshold at £80K where recovery of payments will be tapered to.
  • The claw-back period will be for a period of 12 months after leaving the NHS for those that choose to return to the same sector or sub sector.  
  • Individuals would have a legal requirement to notify previous employers if they return within the 12-month leaving window.
  • These would be minimum provisions and locally employers could go further. 

As part of the Government's consultation the NHS Employers organisation submitted a collective response on behalf of NHS employers in England. We would like to thank all those employers who took time to respond to our survey, which helped inform our response to the Government's consultation.  

The Government is now in the process of laying regulations with will come into effect from 1 April 2016.

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