NHS trade unions, including MiP, have refused to endorse NHS England’s national voluntary redundancy (VR) scheme, describing some aspects of the scheme as “grossly unfair” and warning of “potentially serious” tax implications.

Unions were consulted on the terms of the VR scheme, launched this month as part of government plans to cut ICB staffing by half and abolish NHS England, but say many concerns about the scheme were ignored, and that it offers worse terms than comparable public sector VR programmes.

The unions particularly objected to the ‘clawback’ rules—a mechanism used by the Treasury to recover redundancy payments from former staff who find a new job in the public sector.

Under the new scheme, all staff who take voluntary redundancy will have to pay back a portion of their redundancy pay if they take a job with an NHS employer, an arms-length-body or a government department within six months. In previous VR schemes, the clawback rules have only applied to redundancy payments of over £100,000.

For very senior managers in ICBs and trusts, and executive senior managers working for NHS England, the clawback period will be extended to 12 months.

Commenting on the scheme, MiP chief executive Jon Restell said: “The clawback terms, apparently a Treasury red line, are the toughest ever sought, and many members are unclear what ‘re-employment in the public sector’ means in practice.”

Unions have also raised concerns about the impact of the scheme on staff who have used flexible retirement options, such as partial retirement and ‘retire and return’. Under the national scheme these staff would lose their reckonable service when calculating redundancy payments, something MiP has called “grossly unfair” and called on the government to address. The model scheme also does not allow for payment in lieu of notice (PILON) and prevents staff from negotiating their own exit dates.

“The national VR scheme, which unions refused to agree, will add problems to the mix,” added Restell. “PILON is not allowed and the tax implications of post termination payments for untaken notice are potentially serious. Partial retirement exclusions from contractual redundancy terms are grossly unfair and the issue needs an urgent decision by the department.”

While the Treasury insists that these terms are non-negotiable, trade unions will still demand “meaningful consultation on schemes locally”, Restell said. “We welcome Jim Mackey’s willingness to reset the relationship with the unions around these changes.”

MiP is working with its workplace reps at ICBs to respond to local consultations and will keep members updated throughout the process. In organisations where consultations have been completed, such as NHS England and Commissioning Support Units, MiP urged members to consider their circumstances “very carefully” before applying for voluntary redundancy. “Whether you choose to go or stay, you will be supported,” the union said. //