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Friday 19 July 2019

Unfair redundancy cap discriminates against managers

By Mercedes Broadbemt

Our members’ survey found widespread fear and confusion about plans to restrict exit payments for NHS staff. That’s why MiP is asking the government to think again.

Girl wearing a woolly hat covering her eyes

MiP members “feel targeted, undervalued, and discriminated against” by the government’s proposals for a cap of £95,000 on public sector exit payments, MiP has warned in its response to the Treasury’s consultation exercise. The cap will affect most staff working in the public sector – including all NHS organisations in England – who receive an exit, redundancy or early retirement settlement.

As part of its response, MiP surveyed its members in order to get a clear picture of their views, and used the results to ask the government to consider some important aspects which the union believes the consultation has ignored. The law introducing the cap has already passed, but consultations on the draft regulations for implementing the cap in practice offer MiP an opportunity to try to mitigate some of the worst aspects of the proposals.

MiP has criticised the omission from the consultation process of the government’s separate proposals for the recovery of exit payments from staff who return to work in the public sector within 12 months. These so-called ‘clawback’ proposals have not yet been legislated for, and fall outside of the scope of the Treasury’s consultation. But MiP believes the exit payment cap legislation cannot be adequately considered without also taking the clawback proposals into account.

When asked if they were already aware of the proposed cap, 64% of MiP members said no. When asked if they were concerned about the impact of the cap on them as an NHS employee, 81% said yes, and 63% said they were concerned about the impact on staff they manage. These findings unequivocally demonstrate that MiP members feel that there could be a significant negative impact from the cap not only upon them, but upon the staff they manage – with the clear implication that the ripple effects of the cap could affect virtually all NHS staff.

When asked about the impact on them personally, 74% said the cap could affect their plans to retire, and 70% said the proposals could affect their career plans within the NHS.

84% of MiP members were also previously unaware of government proposals that some or all of the exit payment could be reclaimed if they found work elsewhere in public service within 12 months. 80% said the possibility of clawback may affect whether or not they remain working within the NHS.

These results show both fear and confusion around this issue, as well as a marked lack of communication from government with the staff these proposals are likely to affect. In the midst of a workforce crisis, capping and clawing back of exit payments could lead to senior staff turning down promotions, bringing forward their retirement, or even leaving the NHS altogether.

Some public servants – including the fire service and judiciary – may be excluded from the cap: 80% of MiP members said that this would be unfair. During the consultation period, MiP plans to raise the real possibility that the government’s proposal may be discriminatory, and to ask if an equality impact assessment has been carried out by the Treasury into the potential outcomes of the cap – if not, we would request that an assessment be carried out immediately.

MiP members were also very uncomfortable with the proposal that ministers would decide on any exceptions to the cap. 93% of respondents did not feel comfortable with ministers making such decisions, the strongest response in the survey. This discomfort is understandable – NHS managers are all too used to being made scapegoats by politicians, and the cap would give senior politicians a lever with which to exert control over MiP members – which would necessarily lead to their jobs being politicised.

“I believe that the existence of this cap represents a failure of public policy and is, in practice, an attack on public servants during a time of increased pressures and media attention,” said MiP chief executive Jon Restell. “This cap is likely to make our members feel targeted, undervalued, and discriminated against by these proposals. The real solution to any perceived problem with the number and size of redundancy payments is to reduce the number of redundancies in the first place and retain valuable managerial and other skills in the public sector.”

He added: “The survey results are clear that these proposals will be instrumental for some of our members when taking the decision whether or not to remain within the NHS workforce at a time of recruitment crisis.”

Why the cap doesn’t fit

A selection of responses from MiP’s survey of members on the government proposals for a public sector exit payment cap.

The cap will put people off public service jobs

“There have been several changes which have resulted in worse terms for public sector employees. A further deterioration is not warranted and is likely to prevent younger colleagues and future employees from entering public services.”

“Whilst exit payments easily fail the Daily Mail test, these changes feel like a significant change to my contract and may well impact on the level of risk I’m prepared to take in terms of very senior roles.”

The cap is a waste of skills and talent

“It will deter people from using their transferable skills in other public sector positions. What a waste of skill. The public sector is not going to be a place people will work as even at the end there will be precious little benefit to the employee.”

The cap makes redundancy an easy option

“I have already had discussions about the ease of making people redundant now that this cap is due to come into place. The decision to accept lower grade alternative [jobs] to prevent any gap in service is likely to force staff to accept poor alternatives to their post being made redundant.”

The cap betrays people’s loyalty

“It feels like a betrayal of my contract after decades of service.”

“I have worked for years in the public sector and this is part of the package I’ve worked for. It’s like reneging on my contract of employment.”

The cap discriminates against some public servants

“Certain sectors of the NHS undergo regular change processes often involving non-voluntary redundancy. Both these proposed regulations appear unfair when people may be subject to redundancy not at their choice, and when in many professional roles it is difficult to secure another appointment outside the public sector. It would be doubly unfair should these regulations apply to only some public servants.”

The cap is unfair to managers in the North

“Given the high proportion of public sector jobs compared to private sector jobs in he North (where I live), such a proposal would be discriminatory against those of us who do not have access to the larger number of private sector jobs in the South East. In effect, for a northern based public sector employee, the recovery of an exit package is tantamount to a ban on future working for a year.”

The cap discriminates against managers

“This is unreasonable, unfair and introduces a two-tier system of protections of staff, unfairly discriminating against dedicated NHS staff who have dedicated their career to public service.”

“This would present a tiered system which penalises higher earners with no clear rationale. It will make some staff more vulnerable in organisational restructures and affect their chances of being able to find work if they do leave a 12 month gap after leaving a post. It will make it much easier to eliminate senior staff who may find themselves really compromised with limited options ahead of them.”

Mercedes Broadbent is MiP’s communications and policy officer. For more on the exit payments cap, visit the MiP website at miphealth.org.uk.

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