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ARTICLE · 19 OCTOBER 2020

Public Sector Exit Cap In Force From 4 November 2020

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The long foretold Government plans to introduce a £95,000 cap on the total pre-tax aggregate value of public sector exit payments are now coming into force with very little notice.

CanadaEmployment and HR
Connie Cliff
Connie Cliff
Jane Fielding
Jane Fielding
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The long foretold Government plans to introduce a £95,000 cap on the total pre-tax aggregate value of public sector exit payments are now coming into force with very little notice.

The Restriction of Public Sector Exit Payments Regulations 2020 were made (signed by the Minister) last night and come into force 21 days thereafter, being 4 November 2020.

The 4 November date is critical as if an exit occurs on or after that date, then the cap will apply, even if the terms were agreed beforehand (although in some limited specific cases, it may be possible to seek a discretionary waiver).

The Regulations introduce a £95,000 cap on the total pre-tax aggregate value of exit payments made to most types of public sector employees. The £95,000 cap will apply to the vast majority of public sector authorities and offices, details of which are set out in a lengthy schedule to the Regulations. The cap will apply to any non-exempt termination payments that represent a cost to

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