BMA launches legal challenge to public sector payment cap

by Peter Blackburn

The BMA is launching legal proceedings against the Government after the chancellor proposed to make regulations to cap exit payments for all public sector workers including doctors.

Location: England
Last reviewed: 15 September 2020
slip of pay

The proposed regulations were laid before Parliament in July this year and, if brought into force, they would impose a legal duty on public bodies – including NHS trusts – to limit payments to exiting employees to £95,000 even where doing so ignores existing contractual obligations, including agreed redundancy rights or where the employer otherwise accepts that the worker is owed the sums as agreed compensation for the employer’s unlawful acts.  

The BMA will today ask the courts for permission to apply for a judicial review, and will argue that the Government’s intention to seek to override potential payments due to exiting employees is unlawful as the Government cannot interfere with and override rights agreed in workers’ employment contracts. Doctors’ contracts of employment are nationally negotiated by the BMA and NHS Employers and are the result of lengthy negotiations which take into account the needs of the NHS, NHS Employers and doctors.

The BMA also argues the proposed regulations are contrary to human rights legislation as they put public sector employees at a significant disadvantage in seeking to enforce their rights to peaceful enjoyment of their property, as compared to private sector workers.

The proposed regulations also demand that all doctors, including doctors in training, calculate and notify their employer of all ‘exit payments’ to which they are entitled at the time of leaving employment. The BMA will argue that the legislation would effectively ask junior doctors to do the work of NHS trust HR staff – placing them under the obligation to perform complex calculations, likely to be beyond their competence, every time they rotate.

The BMA sent government lawyers a letter before action, as is protocol, on August 17, setting out the case as to why the proposed regulations would be unlawful. A response was required to that letter by 1 September, but no response was received. 

The regulations will be put to parliament for their approval on Monday (September 21) and will be considered by both the House of Commons and the House of Lords during the course of the week. The regulations will need the approval of both houses to come into force.