Redundancy payments scheme

(Published 22.10.15 - effective from 22.11.15)

1. Purpose

The following scheme sets out Lancashire County Council's approach to calculating redundancy payments.

The Council has the discretion to review the scheme from time to time and make changes to the policy on compensation. In accordance with the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006, where changes are made, the revised scheme will not take effect until one month has passed from the date of publication.

2. Scope

The scheme applies to all employees of the County Council excluding Teachers, whose pay is determined by reference to the School Teachers Pay and Conditions Document. This includes centrally managed teachers.

3. Voluntary Redundancy Payment

A scale of enhanced compensation payments will apply in respect of employees whose service is terminated because of voluntary redundancy after at least 104 weeks of reckonable (continuous) service.

The payment will be calculated in accordance with the terms of the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006 and will be based upon the statutory redundancy payments scale with the entitlement in terms of the number of weeks payable being multiplied by an agreed factor and subject to a maximum number of weeks (see table and additional information below).

Completed year of continuous service	Statutory entitlement	Multiplier
Up to age 21	1/2 week's pay	See information below
From age 22 to 40	1 week's pay	See information below
From age 41	1 1/2 week's pay	See information below

Effective date	Multiplier	Maximum number of weeks
1 April 2015	1.4	42 weeks
1 April 2018	No multiplier (same calculation as for Compulsory Redundancy)	30 weeks (same as for Compulsory Redundancy)

Payments will be based upon an employee's actual week's pay until 31 March 2018. The statutory limit for calculating a week's pay will be used with effect from 1 April 2018.

4. Compulsory Redundancy Payment

Redundancy compensation payments in respect of employees whose service is terminated because of compulsory redundancy after at least 104 weeks of reckonable (continuous) service will be calculated as follows (subject to a maximum of 30 weeks):

Completed year of continuous service	Statutory entitlement
Up to age 21	1/2 week's pay
From age 22 to 40	1 week's pay
From age 41	1 1/2 week's pay

Payments will be based upon employee's actual week's pay until 31 March 2016. The statutory limit for calculating a week's pay will be used with effect from 1 April 2016.

Notes applicable to both voluntary and compulsory redundancy payment schemes:

Continuous employment will be the aggregation of all continuous Local Government related employment within Redundancy Payments (Continuity of Employment in Local Government) (Modification) Order 1999 (as amended).

Reckonable years are counted backwards from the relevant date (i.e. the date on which employment terminates). A maximum of 20 completed years will apply.

A week's pay does not include other payments unless these are contractual.

5. Pension Benefits

Under the Local Government Pension Scheme Regulations, a member of the scheme whose service is terminated because of redundancy and who is aged 55 or over with at least 2 year's membership, is entitled to immediate payment of pension benefits.

Note: The above provisions relate only to employees who are subject to the Local Government Pension Scheme Regulations.

6. Teachers' Pension Scheme Arrangements

The following compensation arrangements will apply to employees who are members of the Teachers' Pension Scheme and whose employment is terminated due to redundancy after at least 104 weeks of reckonable continuous service. This will include Young Peoples' Workers and other employees whose terms and conditions of employment fall under the JNC for Youth and Community Workers (Pink Book) and those employed within Lancashire Adult Learning under 'Red Book' terms and conditions.

Staff over 55 whose employment is terminated on the grounds of redundancy:
Redundancy payments will be calculated in line with the Council's Voluntary Redundancy Payment scheme (see paragraph 3 above) in operation at the time of the offer. Under the provisions of the Teachers' Pension Scheme actually reduced pension benefits may be accessed from the date of termination.

Staff under 55 whose employment is terminated on the grounds of redundancy:
Redundancy payments will be calculated in line with the Council's Voluntary Redundancy Payments scheme (see paragraph 3 above) in operation at the time of the offer.

7. NHS Pension Scheme Arrangements

The following compensation arrangements will apply to employees who are members of the NHS Pension Scheme (NHSPS):

Staff under minimum retirement age and who do not qualify for 'Special Class Status' whose employment is terminated on the grounds of redundancy:
Redundancy payments will be calculated in line with the Council's Voluntary Redundancy Payments scheme (see paragraph 3 above) in operation at the time of the offer.
There are no pension implications for these staff.

Staff who are of normal pensionable age depending upon which section of the scheme is applicable (i.e. age 60 for those in the 1995 Section and age 65 for those in the 2008 Section), or hold 'Special Class Status' and meet the criteria to retire at a normal pensionable age of 55, whose employment is terminated on the grounds of redundancy:
Redundancy payments will be calculated in line with the Council's Voluntary Redundancy Payments scheme (see paragraph 3 above) in operation at the time of the offer.
These staff may also be able to access their NHS Pension without a reduction to their benefits.

Staff who are either age 50 and in the 1995 Section or age 55 and in the 2008 Section of the NHSPS whose employment is terminated on the grounds of redundancy:
The options available to these staff, in accordance with the NHSPS regulations and Lancashire County Council applied discretions are:

Accept an offer of VR and take the full VR payment and leave their pension in the NHSPS until their normal retirement age.

Accept an offer of VR and take the full VR payment and access their pension on the basis of voluntary early retirement with reduced pension benefits, i.e. a reduced lump sum and a reduced annual pension.

Accept an offer of VR without reduced pension benefits. However, there will be a capitalisation cost to this which represents the strain on the NHSPS by releasing their full pension benefits early. In accordance with the NHSPS regulations, these capitalisation costs are deducted from any redundancy payment due. If the capitalisation cost is more than the redundancy payment due, the County Council will be responsible for picking up any additional cost.

For further details about the NHS pension scheme and benefits payable staff should refer to the NHS pension's website - http://www.nhsbsa.nhs.uk/pensions

8. Conditions of Voluntary Redundancy

Approval of any application for voluntary redundancy will be on the condition that the employee agrees that they will not apply for any posts with the Council, including casual work and paid consultancy work, for a period of three years following the termination of their employment.