Change is a fact of life in the NHS. As politicians wouldn’t dare change the model of healthcare in this country, they will often resort to more publicly palatable methods of tinkering with the NHS: namely, top-down restructures.

Staff who have worked in the NHS long enough to see out a parliamentary term will have seen this movie before. They know that structural reform rarely leads to the promised land where services are more efficient, more productive and better for the public. What restructuring undoubtedly does deliver is uncertainty, unrest and chaos for the more than one million people employed by the NHS. Staff are shifted around different parts of the system, established organisations make way for new ones and, inevitably, many staff lose their jobs.

Employers can cut jobs. But the process must be fair and lawful. When embarking on job cutting programmes, NHS employers have a few legal options they can use. Most notably, these are a mutually agreed resignation scheme (MARS), voluntary redundancy (VR) or compulsory redundancy (CR).

Cutting through the jargon is difficult at the best of times but it’s even harder when you’re dealing with the uncertainty that organisational change brings. It’s important to understand how these methods differ to make informed decisions about your future.

A mutually agreed resignation scheme is a voluntary resignation arrangement, distinct from redundancy, under which staff agree to voluntarily resign their position in return for a severance payment.

A MARS is designed to give employers greater flexibility during organisational change by creating vacancies that can be filled by redeploying staff from other roles. It can also help mitigate potential redundancies by providing an alternative option for staff who are at risk.

Staff with at least twelve months of continuous NHS service would generally be eligible to apply under a MARS. These schemes should not be used to address poor performance or disciplinary matters; in many schemes staff are ineligible if they are involved in a formal performance management or disciplinary process.

In the NHS, MARS usually offers severance pay equal to half a month’s salary for every year of reckonable service, capped at twelve months’ salary with an absolute ceiling of £80,000.

Staff who leave under MARS but find another NHS job within a certain timeframe may be required to pay some of their severance payment back. The timeframe varies between schemes, but it’s generally six months. This repayment, known as ‘clawback’, is a mechanism used by the Treasury to recover money from public sector exit payments.

There is no obligation on anyone to apply under a MARS. It’s a voluntary scheme. There is also no guarantee that a MARS application will be successful—your resignation would need to be agreed with your employer, and would be conditional until a binding settlement agreement has been signed by both parties.

A MARS shouldn’t be used as replacement for redundancy. There could be legal implications for employers who agree a resignation with someone only to make their post redundant later. MiP and most other trade unions urge members to be cautious about pursuing a MARS application.

Although they may seem similar in practice, redundancy is legally different from resignation. Staff who are made redundant are not resigning their position. Employers can only dismiss employees through redundancy if they deem the role to be surplus to requirements, not the person.

Employers must consult with staff and/or their trade unions during a redundancy process to ensure that it is lawful. They must outline what jobs are in scope and demonstrate why they would be no longer needed in the future structure. Staff at risk of redundancy should also be offered suitable alternative employment, where possible, to mitigate overall job losses. Staff must be kept informed throughout the process.

While MARS is generally offered during a redundancy process, there is no legal obligation to consult staff on a MARS. Eligibility and selection will also vary.

The exit payment under redundancy, either compulsory or voluntary, is also different. In the NHS, staff are only eligible for redundancy pay if they have worked at least two years continuously at one or more NHS employers. Any break in employment of more than one week means the time worked at a previous employer will not be counted (annual leave and sick leave do not constitute breaks in employment).

Redundancy pay in the NHS is generally calculated at one months’ pay for each year of reckonable service. This is capped at 24 months’ pay, again with a ceiling of £80,000. Depending on the situation, redundancy may be worth double what’s on offer from a MARS—one reason why unions generally advise caution with MARS, especially when a redundancy situation is ongoing or yet to start.

Clawback still applies to redundancy payments, although it varies from scheme to scheme. Whether the redundancy was voluntary or compulsory will also likely affect the clawback period.

With all exit payments, it’s important to consider the tax and pension implications which vary according to your individual circumstances. You should get professional advice on this before executing any agreement.

During any redundancy process, employers have a legal duty to try to limit the number of compulsory redundancies. A compulsory redundancy ultimately means that the member of staff has no other option. Voluntary redundancy, on the other hand, gives staff agency during organisational change. By volunteering, staff who are willing to leave can give colleagues who want to stay an opportunity to find a role in the new structure.

Voluntary redundancy schemes are preferred as they give staff dignity during change. It offers a structured exit option for staff who, for example, are nearing retirement age, have many years of service or who simply wish to leave their employer.

Trade unions are in the business of saving jobs, not helping employers cut them. Mitigating job losses will always be MiP’s number one priority during organisational change in the NHS.

When job losses are unavoidable, we see voluntary redundancy schemes as an effective way to help limit the number of compulsory redundancies which may be needed later.

But not all schemes are created equal. MiP considers voluntary redundancy schemes individually before taking a position on each. One-to-one assistance for individual applications cannot be guaranteed as staff are under no obligation to apply or accept an offer—it’s ultimately your decision.

While MARS may have its place in certain circumstances, it’s generally best not to be rushed into an early decision during the change process. A resignation under MARS may affect your eligibility for unemployment benefits and mortgage protection payments, which is not usually the case when you’re made redundant. You may also miss out on other options that become available later in the organisational change process as the shape of the new structures becomes clearer.

As always, it’s important to take advice from your union and carefully consider all options when faced with a reorganisation. The reality of life in the NHS unfortunately means staff are never too far from the next one. //