The following frequently asked questions (FAQs) are useful to organisations who are running the national mutually agreed resignation scheme (MARS), as well as those who are running a local MARS.
These FAQs cover five main areas:
1. Do you have any further details on the eligibility criteria, that is what sort of things we should expect to consider with our trade union colleagues? We note the advice relating to the inclusion of employees on fixed term contracts.
With the national MARS there is less scope for flexibility and therefore the discussions with trade union colleagues may be more limited. It depends on how creative employers may wish to be within the constraints of the scheme.The type of issues employers may wish to consider are:
- whether to limit the staff groups that would be eligible to apply
- the business criteria/rationale against which applications would be consistently assessed.
2. Can you confirm whether or not staff on very senior manager (VSM) or medical and dental terms and conditions are also eligible?
There are no national restrictions on eligibility. It is down to local discretion whether staff on clinical or VSM terms and conditions are included. Employers will need to assure themselves that applications from any staff are scrutinised to ensure the individual will not be required during the transition period.
3. Would the national MARS apply to deanery-employed general practice programme directors without jeopardising their independent GP status?
The eligibility criteria in addition to that which is set out in the national scheme, is for the employer to determine locally in partnership with their local staff side. In principle, a GP who is directly employed by an NHS employer, in addition to their private practice, could be eligible to apply to leave from their NHS employer under the national MARS.
4. An individual who is currently on a two year secondment has asked if the payment would be calculated on their substantive post, or their secondment post?
This would be for local determination. When looking at eligibility criteria, employers would need to ask themselves what the aim of running the scheme would be for them and what the most cost effective outcome is in the long term. Whether to use the secondment pay rate or not would need to be applied consistently and consideration given to those staff on acting-up arrangements as well.
5. If an individual works for two separate NHS organisations and wishes to leave from one under MARS, would they be eligible to make an application whilst still working in the NHS?
The individual would hold two separate contracts of employment and therefore would be eligible to leave either contract under MARS if they met the appropriate criteria.
6. If a pregnant employee applies to leave the organisation under MARS prior to going on maternity leave, how would this be dealt with under MARS?
This would be for local determination but it is suggested that where a pregnant employee has reached agreement to leave after the eleventh week before the baby is due, their contract would need to be extended to allow them to receive occupational maternity pay and they would then receive their MARS payment at the end of their maternity leave.
For a pregnant woman who would leave before the 11 weeks prior to the baby being due, a business case would need to demonstrate the rationale why significantly delaying the leaving date would be appropriate.
7. In terms of a mutually agreed termination date, is it the Department of Health’s expectation that this should be in line with an individual’s notice period or is there more flexibility around this?
This is at local discretion. There is no expectation that the agreed date of leaving should be linked to an individual's notice period. Both the employer and employee may choose to waive their right to notice. Normally under a time-limited scheme such as a MAR, all staff leaving under the scheme would be expected to leave within a given time frame. Staff should not therefore be given pre-authorisations allowing them to remain in post longer than their notice period.
8. Do organisations need to work with their own auditors to check their scheme?
Local auditors should be involved in accordance with local audit procedures.
9. How does continuous service interact with reckonable service?
An employee would need to have at least one year's continuous service, ie with no break of greater than a week, to qualify for the national MARS, at which time reckonable service would determine the payment rate (for the initial national scheme this was defined in paragraph 8.1, subsequently HM Treasury approved rates up to those equivalent to redundancy level payments).
10. When calculating the payment rates would you include or exclude the following?
- Cost of living payments (COLS) - protected payment to staff who received it pre-Agenda for Change (AfC) but not paid to new staff post AfC? – this would be included in basic pay
- Occupational maternity leave pay, ie do we use their full pay as a basis for calculation? Yes, it would be appropriate to use the full salary for those applying who are on maternity leave.
- Contractual maternity leave - will those who leave under the national MARS need to pay back their contractual maternity leave? This is for local determination but we would suggest that they would not be required to pay back the contractual maternity leave payments.
11. Can recruitment and retention be included in the basic pay calculations?
This would be for local determination, taking into account the financial case for doing so in the context of longer term savings.
12. If an employee has retired and returned to the service what would their payment be?
Where an employee has retired and then returned to work in the NHS, their reckonable service would be re-set to zero from the point of retirement because they would already be in receipt of their NHS pension benefit.
13. Would employers have the discretion to include previous relevant non-NHS service for the purposes of a national MARS payment?
Yes, for the purposes of the national MARS, employers have the discretion to take into account any period or periods of employment with employers outside of the NHS, where these are judged to be relevant to NHS employment (see MARS national scheme: para 8.2). This should already have been agreed with the individual.
14. Are MARS payments free of tax, NI contributions or pension contributions?
HMRC advice states that under the terms of the national MAR scheme, payments of £30,000 and under are exempt from tax and national insurance contributions (NIC). Additionally, providing the payment is in line with the terms of the MAR scheme, payments above £30,000 will not be subject to NIC.
There are no pension contributions payable by the employee or the employer on the payment received.
Leaving and Re-employment
15. The national scheme states 'employees who leave the NHS under MARS would not be re-employed under normal circumstances by the NHS in England, in the same or a different post, before a period of one month has elapsed.' Would GP practices be classed as being part of the NHS for the purposes of MARS?
GP practices are independent contractors and their staff are not normally classed as being NHS employees. For the purposes of MARS, it would depend on whether an NHS employer chose explicitly to include in the compromise agreement a statement that future employment with a GP practice, within six months of leaving, as being grounds for claw back of any MARS payment.
16. If an employee accepts a MARS payment, leaves and is later made redundant from a subsequent NHS job, how is their subsequent redundancy payment affected?
As set out in Section 20 of the NHS terms and conditions of service handbook, paragraph 20.18 states "any severance payment made will be offset against any subsequent payment made for the purposes of any future calculation of redundancy payments in subsequent employment, where the period of employment covered by the severance payment is taken into account in calculating the redundancy payment."
For example, an individual leaves under the national MARS and receives a four month payment (eight years' reckonable service). If they were subsequently made redundant and this eight year period was used for the redundancy calculation, they would get their redundancy payment less any MARS payment.
17. How should leavers under a MARS be recorded in Electronic Staff Record (ESR)?
There are three fields within ESR to record leavers under MARS. These are as follows:
- Mutually agreed resignation - national scheme with repayment
- Mutually agreed resignation - local scheme with repayment
- Mutually agreed resignation - local scheme without repayment
Organisations will need select the appropriate field when recording the reason for leaving related to a MARS payment accordingly.
18. If I leave under MARS and then return to pensionable employment, can I retain access to special class status?
Yes, providing you return to pensionable employment within five years of leaving and to a post that qualifies for special class status (ie nursing, physiotherapist and health visitor grades). If your return to NHS work is after five years, you may be eligible to join the 2008 section of the pension scheme. Further information on scheme eligibility can be found on the NHS Pensions websiteSpecial class members may retire from age 55 provided the whole of the last five years of pensionable employment is spent in a qualifying post. This could include pensionable employment in your previous role.
19. I am 53 and have special class status. If I leave under MARS will I be able to take my pension unreduced at 55?
Only if you return to pensionable employment that qualifies for special class status before you are 55. This will be within five years of leaving. Otherwise you will have to wait until you are 60 to take your pension without a reduction.
20. Should the compromise (settlement) agreement include a confidentiality clause?
MAR schemes should be made following the principals set out in the NHS terms and conditions of service handbook (Section 20) and employers are expected to ensure processes are fair and robust. Where settlement agreements are used as insurance to protect employers from subsequent claims, the use of any confidentiality clause should be in line with the Guidance on the use of settlement agreements and confidentiality clauses. In particular, the agreement should highlight the individual's right to raise legitimate concerns under the Public Interest Disclosure Act 1998, regardless of any confidentiality clauses used in the agreement.