Pay in Lieu of Notice with Redundancy

honeypop

I was made redundant a couple of weeks ago and my letter states that I am now on a 3 month paid notice. The company don't have much work for me so I am only working 1-2 days a week now and they say to look for another job to start asap and if I find something then I can leave earlier than the 3 months. This is in my interests as I'm 11 weeks pregnant and need to get into another job asap, and they have said I will only get paid my notice until I leave the company.
I understand this, I will be leaving so I won't get paid 'notice' past that point, but the company are asking me to leave early as they can't keep me for 3 months, so should they still be paying me the whole 3 months or are they ok to pay me what I work. They don't want me to stay the whole 3 months as there's nothing for me to do anymore, but people are telling me they still owe me the whole 3 months money even if I do leave earlier as requested by them because I find another job. I need to know as we have a meeting about it all tomorrow and I don't want to get my facts wrong.

I'm not after the money if I'm not entitled to it although it would help to put it by as I lose out on SMP now.

oibaldy

I was in a similar position a few years ago. If you are on 3 months notice, they have to pay you all that, tax free. The bonus is that if you hand in counter-notice, you can leave early and actually get all your money up front. The idea behind redundancy is that there is not enough work for you to do, so they can not really argue against you leaving early by saying you need to finish off some work.

The company I left had very poor HR, but hired in an external HR man to ensure that all the redundancies were above board. Despite me having no previous knowledge of employment law, I did a quick search of my rights, knocked up the letter below, and got to leave early with all my outstanding pay. I was lucky in that I quickly found another job to go in to, so my push bike and tele are named after my old company.

Please, go after the money. You are entitled to it.

Good luck in finding a new job, and I hope this letter helps:

[FONT=&quot]11th December, 2003[/FONT]

Following on from a meeting held between myself, xxxxx and xxxxx on 5th December at which I was informed my position was being made redundant, please accept this letter as written counter-notice to leave early, as per Section 136(3) of the Employment Rights Act, 1996. Whilst there is legal precedence for one day being adequate counter-notice, I am proposing a period of one week to allow for all outstanding matters to be dealt with. Therefore, if this period is acceptable, on 18th December I will collect my redundancy pay and hand over any remaining company property (swipe card, keys, etc.).

When considering the sum for redundancy payment, please include the following factors:

·Payment up to and including 4th March, in line with a 3 month notice period from the 5th December (copy of 3 calendar month notice period attached).
·8 ½ days outstanding holiday from 2003 (4 ½ days not yet booked, 1 day booked and cancelled (12th December) as I now need to use that time to find alternative employment, and 3 days for shut-down which, likewise, will be used for job hunting rather than as holidays).
·5 days holidays to be accrued in January and February 2004.
·Statutory redundancy pay.
·Any additional pay-off xxxxxxx may wish to issue to the employees made redundant at this current time.

Obviously, the redundancy payment should be made tax-free and the remaining days of this year should be factored into this tax-free sum.

ceridwen

Now that sounds a pretty constructive letter to me.

If your company gets awkward and won't accept it - then I'd just darn well sit tight and "work" out that notice - even if you have to take in summat to do with you (knitting, book to read, etc). If your contract says you are entitled to that period of notice - you are entitled to that period of notice. End of story.

But that letter does make it pretty plain and I would have thought would cover you - so worth a try first.

LittleVoice

I haven't yet read all of oibaldy's post in depth but wanted to say that it is not the case that "If you are on 3 months notice, they have to pay you all that, tax free. "

If you are due 3 months' notice then that is simply your contractual notice period and should be paid to you after deduction of tax and NI if you continue as an employee in that time.

If they want you to leave early and don't want you to continue as an employee, they are breaking the contract with you and it is therefore customary to pay a sum equivalent to the remaining amount of notice period. (This is "damages" because you are suffering by not being employed and receiving your salary.) This sum can be tax free - as long as there isn't a term in your contract which says they can pay you in lieu of notice. If there is a term which says they can pay in lieu of notice then the payment is contractual and therefore the sum is taxed.

honeypop

Thanks guys, sounds promising then. Meeting has been postponed, think they are looking into it more to check what they are doing is right or wrong, but from what you say then I am entitled to that whole 3 months money even if I do leave earlier. They will do what they can to wriggle out of it I know, but fingers crossed it all goes smoothly.
Thinking about it, the people on 1 months notice were asked to leave earlier and still got their pay in leiu of notice so why shouldn't I?

LittleVoice

honeypop wrote: »

. . . from what you say then I am entitled to that whole 3 months money even if I do leave earlier.

Make sure you don't resign. If you resign, they won't have to pay you for unworked notice. If you do leave early, make sure you have a letter from them terminating your employment.

brightonman123

i think if you leave before notice ends, you may lose any final lump sum. hang in there.