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Public sector workers to be stripped of redundancy payments if rehired within a year

Redundancy payments given to NHS managers, civil servants and local government workers will have to be repayed if they are rehired, under new plans announced by the government.

The new measure, included in the Small Business, Enterprise and Employment Bill currently going through Parliament, will require individuals earning more than £100,000 who take a new job in the same part of the public sector within a year to repay all or part of their redundancy package.

According to the Treasury of the 19,000 NHS administrators made redundant between 2010 and 2013, almost 20% rejoined the NHS while 16% of local government chief executives who left by mutual agreement between 2007 and 2009 had been employed by another council within a year.

Figures also show that more than one in six managers and administrators given payouts worth as much as £650,000 are back working in the health service.

In one case an NHS executive and her husband were given pay-offs worth almost £1m between them, only for both of them to be subsequently rehired elsewhere in the health service.

Those that have been out of work for longer will have to repay less and it will only apply to those given new contracts, meaning that the vast majority of existing public sector workers are unaffected and will be able to keep any redundancy payments.

Chief secretary to the Treasury Danny Alexander said: “It’s only fair that highly-paid executives who receive a redundancy pay-out from the public purse and then quickly return to the same part of the public sector repay the taxpayer.

“Reforming the public sector so it works for Britain has been a key part of this government’s drive to create a stronger economy and fairer society.”

Writing in the current edition of PSE, Paul McFarlane of the Employment Lawyers Association says the government has created confusion and set itself an impossible task with its proposals to claw back public sector managers’ exit payments. His article can be found here.

Tell us what you think – have your say below or email [email protected]


Chris   26/05/2015 at 16:01

The practice of receiving redundancy then working in anothe NHS has been the Norm for years. The Primary Care Managers all took redundancy then formed the CCG as they knew GPs couldn't manage the budgets themselves. They then went on to develope layers of groups each one on indecent salary and pension rights. Every Trust in financial deficit should be independently audited.

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