Regulations on clawing back exit payments "over-complicated and unclear"
The Government’s draft clawback regulations for public sector exit payments are “over-complicated and unclear”, employment lawyers have warned.
The 6,000-member strong Employment Lawyers Association (ELA) said adjustments were needed to ensure the new measures are effective.
In particular the ELA highlighted:
- Lack of clarity around the earnings taper which would trigger a ‘qualifying exit payment’ (those who earned £80,000 are not affected but the regulations do not make clear how those earning between £80,000-£99,999 would be affected);
- Confusion around the date when an exit payment is deemed to have been paid;
- Confusion between the terms ‘hiring authority’, ‘subsequent authority’ and ‘responsible authority’ in various sections of the regulations. These need to be defined clearly, the Association said;
- The definition of the ‘minimum amount repayable’ is contained in the detail of a different piece of legislation. “It should be included in the new regulations for ease of use”;
- Lack of clear guidance on when a hiring authority can decide not to take action to initiate an exit payment repayment.
The Government’s intention through the regulations is to tackle situations where highly-paid executives find new roles within months of receiving five-figure sum exit payments to leave their previous roles in the public sector.
Paul McFarlane, chair of the ELA sub-committee responding to a consultation on the draft regulations, said: “The regulations as drafted would create unnecessary confusion which could prove costly to any one of the parties involved and could discredit Government efforts to crackdown on a perceived wrong.
“It also seems unnecessary to make those seeking to comply with the regulations have to refer lots of other legislation before being clear about what they need to do.
“Some extra time now spent on ironing out all of the wrinkles is much more likely to deliver an effective end product for Government.”
