Restriction of Public Sector Exit Payments Regulations 2020

The timing of these regulations presents a major issue both for councils and for employees.

18 Sep 2020

Key messages

The Restriction of Public Sector Exit Payments Regulations 2020 brings into force the exit payment cap legislated for in the Small Business, Enterprise and Employment Act 2015. The Local Government Association (LGA) has been working with the Government to raise the concerns of councils with the operation of the cap.
The timing of these regulations presents a major issue both for councils and for employees. The cap will come into force ahead of the Ministry of Housing, Communities and Local Government (MHCLG) changing the rules of the Local Government Pension Scheme inhibiting councils’ capacity to complete reorganisations or redundancy exercises. This situation could last for months meaning councils will have to keep staff on the payroll that they would otherwise have exited or they are at significant risk of legal challenge from individuals made redundant.
Without the complementary MHCLG regulations the timing could lead to employees continuing to receive full pensions despite the cap.