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Government consults on restricting exit payments in the public sector

Makbool Javaid

The Government legislated for a cap of £95,000 on exit payments in the public sector in the Small Business Enterprise and Employment Act 2015 as amended by the Enterprise Act 2016. The 2015 Act sets out the duty to implement the cap through secondary legislation. HM Treasury have commenced a consultation which sets out the proposed draft regulations, schedule to the regulations, accompanying guidance and directions. It should be noted that there is an issue with Reg 3, which defines an “exit payment” as “’a’ payment of a description prescribed in regulation 6(1)”. The use of the singular ‘a’, arguably applies the cap to each type of exit payment and not the total payment, whereas Reg 8 refers to the total amount. Hopefully, the final Regulations will clarify the position. 

The updates are kindly provided by Simons Muirhead & Burton Law firm

This update provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and help judgments made in every aspect of the case. Click on the links to access full details. If no link is provided, contact us for more information.  Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

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