The Supreme Court will deal with challenges by a number of public sector unions against the £95,000 exit payment cap after a judicial review was approved late last year. Schools should be « prepared for the challenge » of former employees, whose exit payments were capped after a government reversal in regulation. The Treasury has faced a legal challenge by unions against a £95,000 cap introduced in November last year, which aimed to limit payments to public sector employees who leave, including those who have been laid off. The content of this article does not constitute legal advice and is provided for general informational purposes only. The content is copyrighted by Lee Bolton Monier-Williams LLP. All rights reserved. O`Malley said it would likely affect « very few » schools, but attitudes should always be « prepared for challenges. » « PCS believes this decision contradicts other legal provisions that protect our members, » a union spokesman said. « We also believe that the government has not consulted on the changes in order to reach an agreement, as is its legal obligation. » Richards warned against « lifting » the consequences of the revocation, adding, « We need to keep our legal options open. » Above all, although the rules prohibit the competent authority from making the payment, they do not alter the worker`s right to these payments. Some stakeholders, such as the Association of Labour Lawyers, have suggested that this could lead to litigation. The FDA is launching a lawsuit in the Supreme Court this afternoon to challenge the government`s introduction of a £95,000 cap on exit payments for public sector workers, which went into effect last month. FDA Assistant General Secretary Lucille Thirlby said the union — which represents senior officials — had no choice but to challenge the ministers` actions in court.

PCS, the largest union in the public sector, also submitted a letter to the government before acting, signaling its willingness to work with other unions to challenge the cap. Garry Graham, assistant general secretary of the public sector workers` union, Prospect, said the organization had worked with its lawyers to challenge the cap and how it had been put in place, but would work with other unions. One of the main reasons to challenge the introduction of the cap, as it affects civil servants, is its conflict with the 1972 Superannuation Act. PCS said this week that it believes that the wage cap rules do not comply with legal obligations not only with regard to the Pensions Act, but also with regard to Article 1 of Protocol 1 to the European Convention on Human Rights and the 2010 Equality Act. Civil Service World understands that unions in certain parts of the public sector may have to challenge the cap under legislation other than the Superannuation Act. However, it is possible that the High Court may choose to combine applications for judicial review relating to capping in a major case. While limiting public sector exit payments was one of the Conservative Party`s election promises for the 2019 general election, the bill that passed the decision was introduced without consultation – a reason to challenge the move. On 3 November, the day before the new rules came into force, a consultation of the Cabinet Office on the upper limit was published. Concern was also expressed that payments made under settlement agreements – contracts ending a legal dispute – would be considered withdrawal payments. Stakeholders and a number of MPs and peers suggested that this could encourage the parties to plead rather than agree.

He said the government had « manifestly failed » to comply with its legal obligations, consult properly on the proposals and reach agreement on changes to members` terms and conditions, which could affect workers earning wages below £30,000 a year, as well as the highest incomes. In 2017, the union successfully challenged changes to the public service compensation system introduced in 2016. PCS stated that it had not been properly consulted. The victory meant that the updated conditions were set aside and officials whose exit payments were based on them saw their packages increased. Employers approached by former employees about a capped termination payment are encouraged to seek advice from their legal counsel in these cases, especially if they have agreed to terminate their activities with the employee and payments have been made as a result of a settlement agreement or ACAS COT 3 agreement. On February 25, 2021, the government issued the Public Sector Withdrawal Payment (Revocation) Limitation Ordinance 2021. These regulations repeal the Public Sector Exit Payment Restriction Regulations, 2020 on March 19, 2021. In the meantime, a Treasury directive has been issued to remove the exit payment cap. This follows a Treasury Department review that concluded that the exit payment cap had resulted in « unintended consequences. » .