Holiday Pay and redundancy

ambrub88

Hi there,
Thanks for all the advice folks, here's where I am now, I have been told my consultation will end Feb 27th and unless anything else comes up(offer of employment elsewhere in the company etc) that is when I will leave the company. I am happy with all this to be honest. I have a contracted 3 month notice period and they are going to pay me PILON.
Could someone answer me this question please.......we accrue holidays at approx 2 days per month, and if my notice period is 3 months, should I continue to accrue these holidays even though I will not actually be physically working for them ? Id have thought Im still legally employed by them so they should continue to pay me for holidays i dont take ?
much obliged for any answers please
many thanks

LumpyCustard_2

I asked my solicitor the exact same question this morning, and the answer was along the lines of the following:

You can only accrue holidays up until the day you leave. PILON is a compensation for breach of contract, i.e. where the company lets you go without notice, so there will be no notice period in which you can accrue holidays.

LynneL_3

I was paid 3 months in lieu of notice when I was redundant and they wanted me to go immediately. I was initially told that I would not accrue any holiday pay for the 3 months, however my understanding of notice pay is that they have to give you your full package for the entire notice period (I was paid something in lieu of my medical cover and my car allowance) so I rang ACAS. the advisor that I spoke to said that he saw no reason not to accrue the holiday pay. When I put this to my employer they caved in and paid the holiday pay (6 days pay is a lot when your have no prospect of future income for a while). Perhaps they just didn't want me to make a fuss but at least I got the money.

May be worth a try.

ambrub88

Hello again,
Bringing you up to date, Ive been given an estimate of my final pay as it looks as though my redundancy will be confirmed for the end of February. Firstly my redundancy payment is exactly what I expected, second they have confirmed PILON to cover the 3 months as stated in my contract and if i sign a waiver that i will have no further claim on the company, an extra moth salary tax free. All this sounds fine to me but then they spoilt themselves by saying i would pay tax/NI on the PILON. Im not sure I agree with that as its really a compensation for them breaching my contract and I would have accrued 6 more day holiday pay if i worked my full notice. So am I right to stand firm and ask for it to be non taxed/NI, and should i be extra cheeky and ask for my holiday pay to be included.
In the end of the day its all i have !!! my last pay for a while .

ambrub88

Sorry I should have said they are wanting me to leave immediately on end of February straight after my consultation period ends.

Debt_Free_Chick

ambrub88 wrote: »

All this sounds fine to me but then they spoilt themselves by saying i would pay tax/NI on the PILON.

They can't pick and choose when to deduct tax & NI - it's down to HMRC rules. Whatever they deduct gets handed over to HMRC.

Im not sure I agree with that as its really a compensation for them breaching my contract

No it's not - your contract requires them to keep you employed for three months, so you would have received your normal pay - with tax & NIC deducted - in March, April & May. All they're doing is paying you that upfront, in exchange for not giving you that notice. You will be in exactly the same position as you would have been, had you actually worked your notice so you are no worse off.

and I would have accrued 6 more day holiday pay if i worked my full notice. So am I right to stand firm and ask for it to be non taxed/NI

No - not a chance, sorry.

and should i be extra cheeky and ask for my holiday pay to be included.

Well, you can ask - but bear in mind they are paying you an additional months's compensation, in addition to your PILON, so expect them to feel a little offended

LittleVoice

DFC - see post #5 re PILON. - LV

Debt_Free_Chick

LittleVoice wrote: »

DFC - see post #5 re PILON. - LV

I've assumed it is, hence the employer's comment.

ambrub88

Hi there,
Finally checked my contract, it states "The company reserves the right to terminate this contract immediately without giving the notice required (3 calendar months) by paying to the employee salary (less PAYE deductions) in lieu of notice"
Does this mean a) I should receive 13 weeks PILON instead of the 12 weeks they have offered ? and b) does this mean I should not pay Tax or NI on this PILON either ??

many thanks for all your help .........

reheat

LumpyCustard wrote: »

I asked my solicitor ... PILON is a compensation for breach of contract

I didn't appreciate that useful little bit of info - thanks.