New Guidance on severance payments and approval for public sector employers
The government has published new guidance for the public sector on making termination of employment/severance payments to employees. Click here to read the guidance.
Public sector employers are already bound by “Managing Public Money” guidance and are required to obtain HM Treasury approval for certain types of severance payments.
“Special severance payments” are any payments on termination of employment which do not correspond to an established contractual, statutory or other right.
This new guidance, published on 27 May 2021, provides additional clarity for NHS employers (and others in the public sector). It sets out the approval process, the criteria by which requests for approval are judged, reporting requirements and the penalties for breaching the guidance.
Of particular interest to NHS employers to note is that a breach of the guidance can give rise to a penalty of the greater of five times the amount of the special severance payment value or £10,000.
We regularly advise NHS organisations on the requirements for severance payment approvals and how to minimise the risks.
For more information please contact our employment team.