Redundancy & Minimum Term Contract

wyatt_earp_2

Hi All, I hope someone can help?

Around two years ago my partner and i sold our small aggregates business to a large UK company. We were both given positions and a contract of employment with the new company with a minimum term of three years.

The company is now suggesting i should move on even though i have 1 year remaining on my contract. Can anyone confirm what i would be entitled to if i am made redundant?

Should i be paid the remaining one year's wages and a redundancy i.e. my total service is 8 years, 6 previously on my own and two with the new company? Or would it be just the remaining year's wages?

I know all this type of stuff can get very legal, but i would be grateful for any comments from someone who is in the know!

Thanks

Wyatt

LittleVoice

You mention "partner". Was this a formal partnership or were you joint owners of a limited company?

If it was a limited company that you sold, it sounds like a TUPE situation as long as you were also an employee of the business. So your employment would be continuous - to include the time before the sale.

You need to look at the detail in the paperwork you received when you began working in the new situation.

wyatt_earp_2

Hi LittleVoice

I was not a director, i was just an employee with a shareholding and i was TUPE'd over to the new company. This makes me fairly sure i will have continuity of employment (8 years)

LittleVoice

So, if you are no longer required by reason of redundancy, you would be entitled to a redundancy payment in addition to any contractual payment in respect of your salary.

wyatt_earp_2

Would i be right in assuming the contractual payment for twelve months would be taxed etc. in the normal way and the redundancy be paid tax free?

Do you know a site where i could get something printed on this in case i have to negotiate with them?

Thanks

Wyatt

Conor_3

Yes, redundancy is tax free.

wyatt_earp_2

Thanks Conor.

I would still be grateful if anyone could point me to a site where i could print this sort of info out.

Thanks again

LittleVoice

wyatt_earp wrote: »

Would i be right in assuming the contractual payment for twelve months would be taxed etc. in the normal way and the redundancy be paid tax free?

Do you know a site where i could get something printed on this in case i have to negotiate with them?

Thanks

Wyatt

In general, redundancy pay (unless contractual) is tax-free up to £30K.

Again, I think you need to look at your written contract -
(a) to see whether redundancy is mentioned. If you are entitled only to statutory redundancy pay then that would be tax-free as it isn't very much.
(b) to see if the contract includes reference to what happens if the contract does not run to the full minimum period. I believe there may be a chance that you could be paid PILON and this may not be taxable - it can be compensation for the employer not keeping to their contract but in that case it mustn't be an option they have under the contract.