GMB union success Government back down on exit pay

GMB trade union first challenged the proposed introduction of the exit cap back in 2015

17 February 2021

Your union, GMB union, has been successful in making the government back down on the exit cap that was brought in last year across England.

On 4th November 2020 the Government imposed regulations which put a £95k cap on all public sector exit payments. This pernicious change in the law affected workers in the Local Government Pension Scheme because the cap included Pension Strain Costs

What is the strain cost?

The strain cost is the additional money paid by the employer into your pension scheme to enable those aged over 55 access to receive an unreduced pension; It forms the larger part of the costing.

The cap applied to all payments relating to redundancy (including statutory redundancy), severance and any other payments made as a consequence of terminating a members employment and is applied to all payments made within the 28 days period of exiting an organisation. 

GMB union Win  

GMB trade union first challenged the proposed introduction of the exit cap back in 2015. We detailed a number of responses and representation to the government warning them the exit cap would impact low paid public sector workers. The exit cap regulations started on 9th November, 2020. GMB responded by instigating a Judicial Review. The Government has backed down and announced on Friday 12th February 2021 that the exit cap regulations have been revoked.

Rehana Azam, GMB union National Secretary, said:
“GMB trade union fought hard to protect our members against this pernicious policy.

Let there be no mistake – this victory has been won because the union was about to expose the unjustness of this policy in court.

“Today’s announcement is a victory for millions of public sector workers, but once again it proves that this government is not on the side of our invaluable public sector workers who have put themselves in harm’s way throughout the pandemic.

“At a time when we should be protecting our public sector workforce, the Government has been hell-bent in attacking their hard-fought terms and conditions.

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