Date posted: 01/05/2010

Audience: This Notice will be of particular interest to:

  • HR Staff involved with departures attracting compensation under the CSCS

Action: You should;

  • Read the following advice from Cabinet Office on how the Judicial Review judgment affects ongoing early departures

Timing: Immediate

  1. The Public and Commercial Services (PCS) union has been successful in its application for judicial review of the revisions to the CSCS laid before Parliament on 5th February 2010. The court expects to issue an Order quashing some or all of the amendment scheme. However the detail is subject to further clarification, and decisions on whether or not to appeal the judgment will be taken in due course. We do not know when the terms of the quashing Order will be settled but we would expect it to be within the next month. In the interim, you should take account of the following advice given by Cabinet Office on how to proceed with any early exits.

If an individual has already left (last day of service before 10 May 2010, the day of the judgment) under the new compulsory redundancy terms or if they left under the former Compulsory Early Retirement (CER) terms aged 57–60, or over age 60, and a top-up compensation payment was due (see EPN269)

  1. You may proceed as planned if compensation has not yet been paid. However, depending on the extent of the quashing Order, HM Treasury (HMT) approval may be required retrospectively. Cabinet Office has indicated that they will try to secure blanket approval from HMT so that employers will not have to apply individually. 
  2. Individual has not yet gone but you believe you have given a commitment to:-

(a) Pay compensation under the new compulsory redundancy terms;

(b) Pay the full lump sum compensation of 6 months’ pay to someone leaving under the former CER terms aged 57-60 or over age 60;

(c) Pay compensation to a member of nuvos under the new compulsory redundancy terms.

In considering whether a commitment has been made, please bear in mind that Cabinet Office’s view is that terms do not become binding for voluntary departures until there has been an offer and acceptance – that is, once an employee offers to leave on the terms quoted to them, and the employer accepts the employee’s offer. Cabinet Office’s view is that terms do not become binding for compulsory redundancies until the point of departure. In all cases you should seek HMT approval but there is no guarantee that this will be forthcoming. You can find information and a template for approval for special severance cases on the HMT website under ‘Managing Public Money’ Annex 4.13. www.hm-treasury.gov.uk/psr_mpm_annexes.htm If approval is not given you must pay compensation under the former pre 1 April 2010 CSCS terms. But for nuvos members there are no former CSCS terms and therefore they should be paid the equivalent of the statutory redundancy payment.

Individual will be leaving on compulsory redundancy (or voluntarily in circumstances where Cabinet Office has agreed that compulsory redundancies are likely to be unavoidable) but no commitment has been given (see paragraph 3 above for Cabinet Office’s view of what constitutes a commitment)

  1. You cannot offer the new compulsory redundancy terms. If the individual is being made compulsorily redundant within the next few weeks the former pre 1 April 2010 compulsory early severance/retirement terms will apply. In the light of the judicial review, it should be anticipated that revised new redundancy terms will be introduced at some point. Accordingly, if the planned redundancy falls say, after the end of June, you must tell staff that they will receive the CSCS terms appropriate at their last day of service. This also applies to voluntary departures where Cabinet Office has agreed that the former CES/CER terms can be used because compulsory redundancies are likely to be unavoidable. You must not give assurances or representations to staff that they will receive any particular terms on departure.

Individual has not yet left, and you want to pay the new discretionary exit terms

  1. Cabinet Office does not think that payments will be affected by the Judgment but this will depend on the extent of the quashing Order. So where you have offered the new terms you may continue as planned although it is possible that you will Civil Service Compensation Scheme (CSCS) Judicial Review EPN 275 require retrospective HMT approval for the payments if the quashing Order is extended to include the Discretionary Exit terms. You may consider the safest option is not to agree any payment until the terms of the quashing order are known.

Where you have Cabinet Office approval to pay former Approved or Flexible terms on a voluntary basis

  1. If you have offered these terms to the individual you may proceed on that basis. Where you have not yet offered the terms or the individual has not accepted the terms, you may consider the safest option is to wait until the terms of the quashing order are known.

Re-employment

  1. Those staff who are re-employed after receiving compensation either on the pre 1 April 2010 CSCS terms or the post 1 April 2010 terms should assume that they will potentially have to repay compensation whatever the circumstances of re-employment (and you should seek repayment if any cases should actually arise). The final position will depend on the extent of the quashing Order, but it is the view of the Cabinet Office that the new re-employment provisions should not be affected by the Judgment.
  2. We will of course update you with further information as it becomes available.

Contacts:

Enquiries about content, distribution or to receive in a different format

employerhelpdesk@cabinet-office.x.gsi.gov.uk
01256 846414
Employer Helpdesk
Civil Service Pensions
Grosvenor House
Basing View
Basingstoke
RG21 4HG

Published:
1 May 2010
Last updated:
25 January 2022