A Mutually Agreed Resignation Scheme (MARS) is a form of voluntary severance, designed to enable individual employees, in agreement with their employer, to choose to leave their employment voluntarily in return for a severance payment.
The scheme supports employers by creating job vacancies that can be filled by redeployment of staff from other jobs or as a suitable alternative for those facing redundancy. It also gives greater flexibility to organisations in managing cost reductions as they address periods of change in light of the tough financial circumstances in which they operate.
Developing a local MARS
Trusts wishing to run their own local schemes should follow the principles agreed by the NHS Staff Council and set out in Section 20 of the NHS terms and conditions of service handbook. The NHS Staff Council believes that these reflect good practice and will support NHS employers in developing local schemes in order to help alleviate the need for future redundancies.
MARS approval process
In developing their local schemes, employers need to seek approval from their appropriate oversight organisation for the purposes of MARS:
- For NHS trusts this is NHS Improvement
- For Commissioning Support Units (CSUs) and Clinical Commissioning Groups (CCGs) this is NHS England
- For the Arms Length Bodies (ALBs), Special Health Authorities and Executive Non-Departmental Public Bodies (ENDPBs) this is the Department of Health and Social Care.
HM Treasury is content to extend delegated authority to NHS Improvement (NHSI) to approve local MAR schemes in NHS trusts until 31 March 2019. This is subject to the conditions that have applied previously. Delegation will allow NHSI to approve local schemes proposed by NHS trusts which follow the terms of the former national scheme including the payment rate – with that payment rate set using the notional salary cap of £80,000 (pro rata for part time workers). Any trust wanting to pay a higher rate would still need initial approval from NHSI. If NHSI is content with a scheme which differs from the national scheme then NHSI must seek approval from HM Treasury.
HM Treasury is also content to extend delegated authority to NHS Foundation Trusts to implement local MAR schemes until 31 March 2020 subject to the following conditions:
- each scheme should be appropriately considered and authorised by the trust board
- each scheme should be on the terms of the past national NHS MAR scheme including the payment rate (subject to 3 and 4 below)
- each individual payment must not be greater than £80,000 in respect of any individual
- each scheme to apply a salary cap of £80,000, for staff with total earnings of more than £80,000, the figure used for calculating a MARS payment will be £80,000 (pro rata for part time workers)
- each scheme not to operate for more than three months
- each scheme, including full scheme details, to be notified to NHSI, in advance
- each scheme is a re-run of a previous scheme based on the above criteria and for which HM Treasury approval had been obtained
- conditions for delegated authority may be updated following changes to public sector exit payment terms.
Conditions for delegated authority may need to be updated following changes to public sector exit payment terms later in the year, including for schemes approved by NHSI for NHS trusts.
Employers developing their own local MARS may wish to view the material developed for the national MARS which ran until January 2011.
The following guidance aims to support organisations on local implementation and includes:
General FAQs on MARS - what it is, staff applications, payments and the difference between MARS and redundancy, and Electronic Staff Record (ESR) application. Additional FAQs on running a national MARS include eligibility criteria, notice periods, process, payments, leaving and re-employment.
National MARS - this word version includes the original framework for the national scheme, a template application form and guidance on creating a settlement agreement, and is available for trusts to download and tailor in developing local schemes.
If you are an NHS employer and have any queries about running a local scheme please e-mail email@example.com
Please note, employees should address their queries to their local HR department or trade union representative.