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:
- NHS Improvement - NHS trusts
- NHS England - Commissioning Support Units (CSUs) and Clinical Commissioning Groups (CCGs)
- Department of Health - Arms Length Bodies (ALBs), Special Health Authorities and Executive Non-Departmental Public Bodies (ENDPBs).
Approval will not be given unless there is a salary cap of £80,000. This means that for staff with total earnings of more than £80K, the figure used for calculating a MARS payment will be £80K.
NHS Improvement will require notification of any planned MAR schemes. HM Treasury has delegated authority to NHS Improvement to approve schemes run by NHS Trusts and approval for schemes run by Foundation Trusts will need to be sought from the relevant trust board.
TO NOTE: For employers whose oversight organisation is NHS Improvement delegated authority to approve local MAR schemes has been given by HM Treasury until 31 March 2018.
HM Treasury has extended delegated authority to NHS Foundation Trusts to implement local MAR schemes until 31 March 2018 subject to the following criteria:
- the foundation trust notifies NHS Improvement of the scheme in advance
- the scheme uses the terms and conditions of the previous national scheme (adjusted for any proposed payment variation)
- a salary cap of £80,000 will apply. For staff with total earnings of more than £80,000, the figure used for calculating a MARS payment will be £80,000
- this is a re-run of a previous scheme
for which HM Treasury approval had already been
- the local scheme must not operate for more than three months.
Conditions for delegated authority may need to be updated following changes to public sector exit payments later in 2017.
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 compromise 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.