Voluntary
Severance
Payments Policy
May 2012
Approving authority:
Consultation via:
Approval date:
Effective date:
Review period:
Responsible Executive:
Responsible Office:
University Executive
Secretary’s Board, CJNCC
31 May 2012
31 May 2012
Director of HRD
Human Resources
HERIOT-WATT UNIVERSITY
POLICY TITLE
CONTENT
Section
Page
1 Introduction
3
2 Purpose
3
3 Scope
3
4 Implementation
3
5 Related Policies, procedures and further reference
4
7 Further help and advice
5
8 Policy Version and History
5
Heriot-Watt University’s Voluntary Severance Payments Policy
1.
INTRODUCTION
Voluntary Severance is one of the available processes by which the University may
require to effectively manage its staffing requirements in the light of a Review as well
as in other circumstances.
The University’s stated aim is to work in partnership with its recognised Trade Unions
to manage this process as far as possible by voluntary means. To that end it is
recognised that a fair and reasonable severance package needs to be available to
eligible employees.
The University has established a voluntary severance package which it believes
ensures the balance between the long-term economic stability of the University and the
interests of employees.
The University has an existing policy on Early Retirement applicable to all staff. That
policy continues to operate in parallel to this policy.
As a part of a review of the efficiency of a School/Institute or Professional Service
volunteers for severance may be sought under the voluntary severance scheme.
Severance packages will only be available where it can be clearly demonstrated that a
potential redundancy exists or that voluntary severance will result in the avoidance of
the redundancy of another member of staff. All agreements must be in the interests of
the University. The University retains the right at all times to turn down any application
for voluntary severance where there is a need to retain specific skills or experience or
where the business case for the departure is insufficient.
Where a voluntary severance package is agreed with an employee, there will not
normally be any subsequent re- engagement or re-employment of that employee by the
University unless for a specific short-term project for which no other resource can be
found.
2.
PURPOSE
3.
To set out clearly the severance payments made where individuals volunteer for
redundancy.
SCOPE
This Policy applies to all UK-based University employees and is designed to
ensure that the University’s approach to change/restructuring is fair and
consistent.
Employees not based in the UK will normally have a separate policy and
process due to differing local Labour laws. This will be explicit in the
appropriate contract terms and conditions.
This policy does not form part of employees’ contracts and may be amended
from time to time.
4.
IMPLEMENTATION
SEVERANCE PAYMENT
The severance payment scheme will mirror the statutory redundancy scheme as
follows:
Version 1: May 2012
Author: Helen Hymers
URL
3
Heriot-Watt University’s Voluntary Severance Payments Policy
For all staff with at least 2 complete years of service at the date of termination:



1 week’s pay for each [complete] year of service between 18th and 22nd birthday
2 weeks’ pay for each [complete] year of service between 22nd and 41st birthday
3 weeks’ pay for each [complete] year of service birthday from 41 onwards
All calculations are based on actual weeks’ gross pay and will be capped at the
statutory maximum of 20 years’ reckonable service. Actual weeks’ pay is calculated as
annual salary/52.1429 and excludes additional payments such as overtime, shift
premia, consultancy or honoraria.
Where an employee has, in the previous 12 months, reduced his/her hours as a means
of avoiding redundancy, his/her severance pay will be calculated on the salary earned
on the substantive FTE immediately prior to the reduction in hours taking effect.
Lump sum payments will be made having regard to the relevant legislation on taxation
which allows the payment of up to £30,000 without any deduction of tax or National
Insurance contributions.
All members of staff receiving a voluntary severance package would be required to
sign a Compromise Agreement.
ACCESS TO PENSION
For members of staff who are members of the superannuation scheme and are eligible
for early payment of pension, if their application for VS is accepted, the University will
allow access to pension and fund the appropriate strain payments to the scheme in
addition to paying the severance payment to the individual.
NOTICE PERIODS
The University will require individuals to work the appropriate notice period, unless
specific circumstances render this impracticable. Should this be the case, individuals
will receive outstanding notice entitlement as a payment in lieu of notice, subject to tax
and NI deductions.
INTERNATIONAL CAMPUSES
This policy does not apply to staff employed at HWU Malaysia campus, the Dubai
campus or on TECOM terms and conditions. In addition, different labour laws apply.
Any severance payment or process which may be offered at an international campus
will be in line with specific terms and conditions at each campus.
REVIEW OF POLICY
The university reserves the right to review this policy from and to amend the severance
payments time to time in line with agreed consultation processes. Such review would
not take place during a “live” change/restructure situation.
5.
RELATED POLICIES, PROCEDURES AND FURTHER REFERENCE
Policies
 Redeployment Policy
 Voluntary Severance Policy
 Redundancy Seletion Policy
Version 1: May 2012
Author: Helen Hymers
URL
4
Heriot-Watt University’s Voluntary Severance Payments Policy
Procedures
 Voluntary Severance Procedures
 Redeployment Procedures
 Redundancy Selection Procedures
7.
FURTHER HELP AND ADVICE
http://www.hw.ac.uk/hr/su_list_hr_staff.php
8.
POLICY VERSION AND HISTORY
Version No
V. 1
Version 1: May 2012
Author: Helen Hymers
URL
Date of
Approval
31st May 2012
Approving
Authority
University
Executive
Brief Description of
Amendment
VS policy & procedures updated
and replace 2001, 2008, 2011
VS Policy & Procedures
5