Thousands of workers get less pay as government confirms redundancy pay switch

The government wants public sector organizations to stop paying so many severance packages to departing employees, saying they are wasting taxpayers’ money and need to be justified

The government is targeting payments that can exceed £100,000
The government is targeting payments that can exceed £100,000

employees in the public service are likely to receive less money if they leave their role as part of a government crackdown.

The government is targeting “special severance payments” (SSPs) – one-off payments that public sector workers can receive when they resign.

SSPs can take various forms. For example, in addition to cash payments, some workers have loans written off or continue to receive their employee benefits after they leave work.

These payments can be in excess of £100,000 and are paid to full-time public sector employees and employees such as contractors.

councils and organizations such as Transport for London, can create SSPs when employees quit, are made redundant or agree to leave.

But now the government is asking public sector organizations to slash SSPs, in a blow to public sector workers.

A statement today from the Leveling Department said: “Most public sector workers enjoy statutory and contractual termination or severance terms that are significantly better than the statutory minimum right to termination and often exceed the value of termination or severance payments paid in the private sector.

“The Government believes that paying additional, discretionary sums on top of these entitlements (“special severance payments”) does not typically represent value for money or fairness to the taxpayers who fund them and is therefore only contemplated.” should be exceptional.”

Public authorities must now justify these payments and provide “clear, documented justification for doing so,” according to the government.

The government added that public bodies should only create SSPs when there is no cheaper way for a worker to leave the company.

These organizations should also think carefully about what other public services they could spend SSP money on, the government said.

“All special compensation inevitably reduces the funds that would otherwise be available for the provision of important public services,” said a government statement.

Some public bodies are making SSPs to avoid a labor tribunal, and the government said they should only do it if it’s cheaper.

However, these organizations may create SSPs in exceptional circumstances.

The Government said: “There may be exceptional circumstances where existing statutory or contractual rights, or both, are insufficient to facilitate an exit or to provide adequate compensation for loss of job or office.”

SSPs are also permitted where a worker’s normal pay could be disrupted, such as B. A local councilor taking a break to follow their spouse for military service abroad.

“In exceptional circumstances where it is decided that special severance pay should be paid, it is the responsibility of individual employers to ensure that their severance pay arrangements are fair, proportionate and lawful and represent good value for the taxpayer” , the government added.

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Fry Electronics Team

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