Clawback regulations for public sector exit payments unclear, say employment lawyers

The government risks undermining its crackdown on public sector exit payments by making its clawback regulations over-complicated and unclear, according to employment experts.

The Employment Lawyers Association (ELA) has urged the government to make adjustments to ensure the new measures are effective.

The regulations flow from concerns that highly paid public sector executives were walking into new roles within months of receiving five-figure sum exit payments to leave their previous roles. The government has said it is keen to clawback such payments.

However, the ELA has claimed the government's draft regulations are 'unnecessarily complicated' and likely to be unhelpful to all involved, be they employees, employers, or prospective employers.

'As ever, the devil is in the detail. 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,' said Weightmans partner Paul McFarlane, who chaired the ELA working party that drafted the response to the consultation.

'It also seems unnecessary to make those seeking to comply with the regulations to have to refer to 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.'

The ELA has highlighted a 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 and £99,999 would be affected.

Confusion around the date an exit payment is deemed to have been paid and a lack of certainty between the terms 'hiring authority', 'subsequent authority', and 'responsible authority' in the regulations was also singled out by the ELA.

The association also said that the definition of 'minimum amount repayable' should be included in the new regulations for ease of use.

Finally a lack of clear guidance on when a hiring authority can decide not to take action to initiate an exit payment repayment should be addressed, according to the ELA.