Government backs down on exit payment cap after Prospect legal challenge

The government have announced that regulations introduced last year to cap exit payments to staff in the public sector are to be withdrawn.

These regulations, laid in November, were being challenged through a Judicial Review brought by Prospect as well as a number of other unions.

The regulations implemented the government’s £95,000 cap on exit payments. Prospect has always argued that while the policy was presented as being focused on the exit packages for the more highly paid, because the arrangements also cover pension strain payments made by an employer to a pension scheme, the arrangements will impact upon longer serving staff on modest salaries.

The cap was so widely drawn that it would have caught staff working in nuclear decommissioning, often overriding pre-existing agreements.

Garry Graham, Deputy General Secretary of Prospect said:

“Our robust legal challenge has been successful.

“Despite initially contesting our legal case to go to Judicial Review- the government has now thrown in its hand. They have also conceded anyone the cap has been applied so far to should be compensated.

“We said at the time we believed the governments approach was both unlawful and chaotic and have been proven right. This demonstrates the value in a union like Prospect protecting the legal rights of members”