Individuals who leave one public sector organisation with an enhanced redundancy or severance payment should have to repay all or some of the money if they begin work for another public sector organisation within twelve months of leaving.
The principle in that paragraph is uncontroversial, is definitely popular amongst the general public and is now part of the law, having been included in what, considering it applies to megalithic public sector organisations, is confusingly titled the Small Business, Enterprise and Employment Act 2015.
We now have sight of the draft Regulations necessary to bring that principle into effect.
The HR managers charged with policing this rule will need to have handy a calendar, a calculator and a qualification in geometry in order to do so accurately.
Here is an extract from Regulation 7(1)-(3) of the draft “The Repayment of Public Sector Exit Payments Regulations 2016”:
Click here to view the image.
There is more, but the point is made. I know large organisations will establish mechanisms to cope with all this and specifically to find the necessary values for the components A to F.
But the same resources will not be available to the individuals who will face the demand for repayment.
It is proposed that the duty to repay will arise when an individual “returns to the public sector” (Regulation 6(1)).
The precise repayment due cannot be calculated until the date of return to the public sector is identified as it is needed to establish the value of component ‘D’ in the calculation formula reproduced above.
So, the exact implications of a return to work might not be known by the returning employee until it is too late to stop the payment falling due in full. And even if the employee leaves his new employment in shock before the morning tea break, that will be too late. The repayment obligation will have been triggered, and there is no process which can be used to reverse the implications.
It is obvious then that individuals will have to take care when returning to work in the public sector within a year of receiving a settlement.
A more controversial question arises: to what extent does the hiring organisation have a duty to warn their new starts of the repayment which might fall due?
It used to be the case that the employee bore the risks of a mistake like this alone, even if genuinely ignorant of the implications until too late.
The law, though, particularly where the employment contract is concerned, has taken a more paternalistic turn in recent years and so the unsuspecting employee forced to hand back an exit payment might well be able to blame his new employer for failing to draw his attention to the consequences, particularly where the CV reveals recent public sector employment.
Someone will get caught out by this and when it happens it will be nasty. Make sure it’s not you.