Big win for UNISON as government throws out exit payment cap

The government has announced that the public sector pay cap has been scrapped, following pressure from UNISON.

The £95k cap on exit payments would have impacted significantly on low earners, as it would have included pension payments. UNISON was due to bring a Judicial Review to the High Court later this month, but the government published a direction on 12 February that scraps the cap.

The government acknowledged that the cap would have “unintended consequences”, such as significant reductions in pension for low and middle income public sector workers who are made redundant.

Responding to the government announcement, UNISON general secretary Christina McAnea said:

“It’s great the government has finally seen sense and stepped back from this damaging regulation that threatened to blight the retirement of millions of workers.

“Through no fault of their own, long-serving staff over the age of 55 and facing redundancy would have been hit by the regulation. Because they’re obliged to take their pensions if they lose their jobs, when combined with redundancy payments the final amount could have exceeded the £95,000 cap.

“All along the Treasury was told that the regulations were flawed, and they would hit ordinary workers. Unfortunately, ministers wouldn’t listen, so UNISON had to take them to court.

“The government has wasted much time and money and should now abandon any plans to re-introduce the regulations.

“Instead, ministers should concentrate on supporting dedicated public service workers who are delivering for their communities in the most challenging of circumstances.”

Our branch Secretary, Wendy Nichols, added: “This is another great victory for our members, especially low and middle income women workers. UNISON has yet again forced the government to u-turn and back down.

“Whilst the public are rightly concerned when they hear of huge exit payments made to very senior officers in the public sector, these regulations would have significantly impacted on low and average income workers who are currently at the front line of the Covid response.

“Once again, this u-turn shows that there is power in a union”.

Download the Treasury Directive which revokes the public sector exit payment cap