Gratuities
16. The principal Regulations are amended by substituting for Part K the following:
“PART KGRATUITIES
Interpretation
K1.—(1) In this Part, unless the context otherwise requires—
“annual rate of remuneration”means the annual rate of the employee’s remuneration in respect of the relevant employment (ascertained as if paragraphs 4 and 5 of Part V of Schedule 16 had applied) at whichever of the following times yields the highest figure::
the date on which he ceased to be employed,
12 months before that date, or
24 months before that date;
“lower earnings limit”and“upper earnings limit”mean the annual equivalents of, respectively, the lower earnings limit and the upper earnings limit in force under section 4(1) of the Social Security Act 1975(1) at the time at which the annual rate of remuneration falls to be ascertained; and
“service”is to be construed in accordance with paragraphs (2) to (4).
(2) Subject to paragraphs (3) and (4), a person’s service is the time spent by him in employment with any scheduled body or former local authority.
(3) A person’s service does not in any case include any period—
(a)before attaining the age of 18 or after attaining the age of 70, or
(b)in excess of a total of 40 years, or
(c)in respect of which a gratuity has been granted under a local Act, section 18 of the Act of 1953, the former Regulations, or these Regulations.
(4) Where regulation K2(a) or (b) applies, a person’s service does not include any period—
(a)in respect of which he has retained rights in a scheme which was a relevant scheme for the purposes of regulation G14 of the 1974 Regulations, or
(b)which has been or may be taken into account for the purpose of calculating any benefit under any public service scheme,
but where regulation K2(c) (death while in employment) applies it includes periods of those kinds before 1st April 1987.
Persons to whom Part K applies
K2. This Part applies to a person employed, otherwise than as a teacher, by a scheduled body if he—
(a)has been employed by the body for not less than 5 years and ceases to be employed by them, or
(b)has been employed by them for not less than one year and—
(i)has attained the age of 60, or
(ii)is incapable of discharging efficiently the duties of his employment by reason of permanent ill-health or infirmity of mind or body,
and ceases to be employed by them, or
(c)has been employed by them for not less than one year and dies while in their employment.
Power to grant gratuities
K3—(1) The body who employed a person to whom this Part applies may grant to him or, where regulation K2(c) (death while in employment) applies, to his widow or any other dependant of his, a gratuity which may consist of a lump sum or an annuity or both.
(2) Where—
(a)the gratuity granted under paragraph (1) is or includes an annuity granted to the person himself, and
(b)he dies before receiving payments of the annuity of an aggregate amount equal to its capital value,
the body may grant a further gratuity by way of an annuity to his widow or any other dependant of his.
Amount of gratuity
K4.—(1) The amount of a gratuity, which is to be taken as including the capital value of an annuity, granted under regulation K3(1) is not to exceed
where—
A is the annual rate of remuneration,
B is the total of the length in years and days of the person’s service before 1st April 1987 and 50% of any war service in respect of which a period might have become reckonable as reckonable service under regulation F6 if the conditions in regulation F3(2) to (10) had been satisfied,
C is the lesser of the annual rate of remuneration and the lower earnings limit,
D is the length in years and days of the person’s service after 31st March 1987 except, in the case of a person who had not before 1st April 1987 attained the age of 55, any service which would have become reckonable as reckonable service if he had on 1st April 1987 made any election which he was entitled to make under regulation B1(18) or paragraph 1(1) or 5(2) of Part IV of Schedule 2 and, if he has made an election under regulation B1(15B), any service which would have become so reckonable if he had not made the election, and
E is any amount by which the annual rate of remuneration exceeds the upper earnings limit.
(2) The capital value of an annuity granted under regulation K3(2) is not to exceed the difference between the capital value of the annuity granted under regulation K3(1) and the aggregate amount received by the person to whom that annuity was granted.
Finance
K5. The cost of a gratuity granted under this Part is not to be met out of any superannuation fund.
Application to certain bodies and employees
K6.—(1) This Part applies in relation to the committee of magistrates for the inner London area as if that committee were a scheduled body, and paragraphs (2) to (5) have effect for modifying its application in relation to that committee and to probation committees and magistrates' courts committees.
(2) The probation committee for an area other than the inner London area are to report any decision made by them under regulation K3 to the body responsible for defraying the expenses of the committee, or, where two or more bodies contribute to the defraying of those expenses, to each of those bodies.
(3) A magistrates' courts committee are to report any decision made by them under regulation K3 to the body who paid the employee’s remuneration.
(4) Where a report is made under paragraph (2) or (3) above, regulation N8 has effect as if any body receiving the report were a person mentioned in paragraph (3) of regulation N8 (service of notice of appeal) and paragraph (2) of regulation N8 were omitted.
(5) Any decision made under regulation K3 by—
(a)the probation committee for the inner London area, or
(b)the committee of magistrates for that area,
is to be reported by the committee to the Secretary of State, and has no effect until approved by him; and any gratuity granted by virtue of such an approved decision is to be paid by the Receiver for the Metropolitan Police District.
(6) Where—
(a)a person is employed, otherwise than as a teacher, by the governors of a voluntary school maintained but not provided by a local education authority for such education as may be provided by a local education authority under Part II of the Education Act 1944(2), and
(b)the local education authority have by a statutory resolution specified him as an employee, or specified a class of employees to which he belongs as a class of employees, to whom this Part is to apply,
this Part applies to him as if he were employed by the local education authority.”.
1975 c. 14; section 4(1) was amended by the Social Security Pensions Act 1975 (c. 60), Schedule 4, Part I, paragraph 36(a).