Public sector payout cap scrapped

The redundancy payout cap has been removed for public sector workers.

letter cubes spelling 'redundancy'


The Treasury has announced that a £95,000 cap on payouts for public sector staff in the UK, imposed in November, is being repealed.

Trade unions had challenged the cap, which applied to civil servants and staff in local government, government agencies, and arms-length bodies, on the grounds that it would override pre-existing contractual arrangements, and that the government had failed to properly consult on the change.

Garry Graham, deputy general secretary of the Prospect trade union, said the legal challenge had now succeeded, and that the government has “also conceded that anyone the cap has been applied so far to should be compensated.”

Prospect had warned that the cap would cover pension payments, and as such could affect longer-serving workers on modest salaries, not just the best-paid. Unison general secretary Christina McAnea described the cap as “damaging”, saying: “Through no fault of their own, long-serving staff over the age of 55 and facing redundancy would have been hit by the regulation . . . Because they’re obliged to take their pensions if they lose their jobs, when combined with redundancy payments the final amount could have exceeded the £95,000 cap.”

Meanwhile, in other employment news, the Chartered Institute of Personnel and Development (CIPD) has launched practical guidance for UK employers to help them understand their responsibilities towards staff and support them as the UK’s Covid vaccine rollout continues. Employers can’t force staff to have the vaccine, but they should encourage them to, says the CIPD. Chief executive Peter Cheese said: “The widescale vaccine rollout really is uncharted territory for employers. Many are confused as to what their role in it is, to protect their workforce, business and customers.”

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