Redundancy - Entitlements

Kaiyo

Hello,

Sorry for creating an additional post. I need to clarify details with regards to what money I am entitled to. The details and questions are as follows:

I have been with my company for over 5 years, so I am entitled to 5 weeks notice period. I have been told that this is the notice period that my employer has to give me from the day I am made redundant. Am I correct to say that I should received FULL pay as per my salary for the whole duration of the 5 weeks?

Should they put me on Garden Leave, am I still eligible for full pay for the 5 week notice period?

In addition to the salary I should be paid for the 5 weeks notice, am I entitled to additional Redundancy Payment of £350 x 5 weeks = £1750?

Therefore do I get both my Salary and Redundancy Payment? Or is it a case of either/or?

I appreciate any help on this. Thanks

sunshinejoclaire

You are entitled to 5 weeks notice plus the 5 weeks statutory redundancy.

I can't answer the questions about the garden leave though, sorry

dickydonkin

Hi Kaiyo

First of all, your age and service is very relevant to you statutory redundancy payment which has just been raised to £350.00 for every years continuous service, assuming you are over 22 years of age. The basic rate is multiplied by 1.5 times this amount if you are over 41 years of age. Furthermore, you must have attained two years continuous service to be eligible for any redundancy payments. Statutory redundancy payments are capped at 20 years service.

Also, depending on the amount of redundancies announced at your workplace, there should be a consultation period. Have you been provisionally selected for redundancy i.e. consultations are ongoing? If this is the case, it is not unusual to be put on 'garden leave' until the consultation process has been exhausted and your redundancy is confirmed, usually after an appeal. You will be paid while on gardening leave - but this does not constitute as lieu of notice. Your lieu of notice will commence after your confirmed date of redundancy.

You should have been informed IN WRITING IN ITEMISED FORM by your HR department exactly what your entitlements are including any outstanding holiday pay etc.

Your lieu of notice payments should be exactly the same as you wages including deductions such as N.I/Income Tax/Pension etc. Also, your retain all of your benefits within that period - such as life insurance, private health care car/phone (although the latter two may be substituted by a cash equivalent). The retention of these benefits are very important as PILON will likely be taxed as if these 'benefits in kind' are still in place.

The link below from BERR should provide you with more info.

Best of luck anyway - look at your redundancy as an opportunity to find new skills - meet new people and challenges - hard I know - but stay positive!

http://www.berr.gov.uk/files/file47510.pdf

Kaiyo

Oh that's good news then! Thanks so much sunshinejoclaire for your reply on both my posts =D

Kaiyo

dpassmore wrote: »

Hi Kaiyo

First of all, your age and service is very relevant to you statutory redundancy payment which has just been raised to £350.00 for every years continuous service, assuming you are over 22 years of age. The basic rate is multiplied by 1.5 times this amount if you are over 41 years of age. Furthermore, you must have attained two years continuous service to be eligible for any redundancy payments. Statutory redundancy payments are capped at 20 years service.

Also, depending on the amount of redundancies announced at your workplace, there should be a consultation period. Have you been provisionally selected for redundancy i.e. consultations are ongoing? If this is the case, it is not unusual to be put on 'garden leave' until the consultation process has been exhausted and your redundancy is confirmed, usually after an appeal. You will be paid while on gardening leave - but this does not constitute as lieu of notice. Your lieu of notice will commence after your confirmed date of redundancy.

You should have been informed IN WRITING IN ITEMISED FORM by your HR department exactly what your entitlements are including any outstanding holiday pay etc.

Your lieu of notice payments should be exactly the same as you wages including deductions such as N.I/Income Tax/Pension etc. Also, your retain all of your benefits within that period - such as life insurance, private health care car/phone (although the latter two may be substituted by a cash equivalent). The retention of these benefits are very important as LIN will likely be taxed as if these 'benefits in kind' are still in place.

The link below from BERR should provide you with more info.

Best of luck anyway - look at your redundancy as an opportunity to find new skills - meet new people and challenges - hard I know - but stay positive!

http://www.berr.gov.uk/files/file47510.pdf

Hey dpassmore, thanks for your detailed reply! I am between 22 and 41 so I fall in the basic rate category. So with my continuous employment of over 5 years I should get £1750 in redundancy pay. Is is taxable? Do I have to inform the tax office that I have been made redundant?

There is appoxiamately 7 people who will be made redundant, so that falls under the 20+ people section that I just read about. Does that mean my company does not have to offer a minimal consultancy period?

I had my first consultation at the start of this week and my second consultation is at the end of this week where they will determine if I will be made redundant or not. They have expressed that it is highly likely I will be put on garden leave.

I haven't received a in writing a itemised form from HR, only a letter confirming that I have been provisionally selected for redundancy.

Thank you I am trying to stay positive, I have no choice so I know there is no point being upset about it even though it is hard not to due to the current state of the economy.

dickydonkin

Kaiyo,

Statutory redundancy payments are not taxable (But any enhancements and PILON are) and you should recieve the amount you stated. If it is any consolation to you, I believe the actual payment went up from £330.00 to £350.00 only on Feb 1st this year. I would expect that if you have been confirmed as redundant after that date, you should receive the new amount.

You will get your statutory redundancy payment and your lieu of notice payments, however, depending on how your company pay the wages depends on how you receive it. You may get our redundancy payment by cheque and your lieu of notice payment on your normal pay day paid in the bank (if that is how you get paid).

What I would advise is that you inform jobseekers straight away.

Irrespect of what savings you have you should be entitled to 'contribution based' Jobseekers allowance for 6 months. After that it will be means tested and will be based on any income you have at the time and any savings you have (threshold is currently £16,000 I believe). Hopefully you will have a job by then - but don't be ashamed to claim what you are entitled to.

Regarding the consultation period - your company certainly has to engage in 'meaningful consultation' (depending on the number of affected employees). I find it strange that your company have a defined timescale for consultations to be completed. They assume that meaningful consultations can be completed in a determined time. For example, issues may come to light that cannot be resolved in two consultation hearings.

A couple of years ago, I was made redundant after fifteen years. I had an outstanding issue with my pension which could not be resolved.
The company had to hold another hearing to enable them to consult their legal team (I was on gardening leave and getting paid). It turned out that I was correct and resulted in me being paid another £900.00.

Yes - getting paid off is a bummer - but you must ensure that you are happy (perhaps unfortunate terminology) with everything before leaving.

This is again very topical for me right now as my wife has just been made redundant. I am currently assisting her as she has been blatantly unfairly selected. Also, because this is now going to tribunal, her former employer is sending out inaccurate and misleading references which is tantamount to negligence at best and victimisation and discrimination at worst.

Hopefully your former employer is reasonable but check that any selection matrix (which I hope your company have compiled and applied fairly) is acceptable and their procedures have been fair and just.

Good luck anyway.

dickydonkin

Kaiyo

What I am assuming is that you earned £350.00 per week or over. If this is not the case, you will get your actual weekly wage x 5.

The £350.00 is actually a maximum payment.

You can work out your payment by clicking the link below

http://www.berr.gov.uk/whatwedo/employment/employment-legislation/employment-guidance/page33157.html

Kaiyo

dpassmore wrote: »

Kaiyo

What I am assuming is that you earned £350.00 per week or over. If this is not the case, you will get your actual weekly wage x 5.

The £350.00 is actually a maximum payment.

You can work out your payment by clicking the link below

http://www.berr.gov.uk/whatwedo/employment/employment-legislation/employment-guidance/page33157.html

Thanks again for your detailed response, you have been such a great help!:beer: Yes, I already read about the £350 max payment on ACAS.org.uk. I do qualify for the full amount, so that is good and even better than it has gone up from £330. I was intially disappointed as I thought that the redundancy pay is all I will get.

I didn't know I could apply for contribution based JSA regardless of how much savings I have for the first 6 months. That will come in useful! Thank you again! Should I inform Jobseekers even thought I have not officially been made redundant?

I'm really not sure about the consultation periods as this is the first time I have been made redundant, all this is very new to me.

Although like you said, being made redundant is a bummer, there is always a light at the end of the tunnel... and who knows, this may be the break that I have always wanted? Happy days :cool:

I wish you and your wife luck, hopefully things will turn out well :cheesy:

Kaiyo

I've just read my contract of employment and there is a PILON clause in there, where any PILON payment consists solely of my basic salary. Does that mean I will not get any other payments such as my monthly car allowance?

I assume that basic salary would mean the gross salary I receive as stated in my contract?

Would PILON be applicable to me? If so, in what circumstances can my company apply that to me?

dickydonkin

Kaiyo

In theory,that might put a different picture on things when clauses are stipulated in your contract of employment.

Your consultation hearings are an ideal opportunity to raise and clarify such issues with your employer. Also make sure you receive copies of any minutes or notes taken from your individual consultation.

The amount of a 'weekly pay' to be taken into account is the amount you are entitled to under the terms of your contract of employment on the 'calculation date', however, If your hours/pay varies, I understand that an average is calculated.

As I stated in an earlier post, your employer has a legal obligation to itemise your entitlements prior to your departure. It might be a good idea to ask for a calculation of your payments prior to your next consultation meeting and write down any other questions regarding your situation (pensions etc) that you are unsure about and you need clarification.

I would seek advice about the clause in your contract of employment that stipulates that only your basic salary will be paid in lieu of notice - In theory, you should retain all terms and conditions of employment during your lieu of notice period, however, I am unsure how a clause in your contract of employment can negate a potential legal requirement.

Redundancy is a legal minefield and it has to be applied correctly by your employer. Anything you are not sure of in relation to your redundancy, try the ACAS helpline on 08457 47 47 47

Regarding the jobseekers - as soon as you are confirmed as redundant, contact them by phone (check your local js) and you will be interviewed over the phone. You will then be given a timed interview at your local jobseekers - all time consuming and laborious I might add. Although everyones circumstances are different, in theory - if you have paid sufficient N.I. contributions (which you should have done) you shou;ld get the six months contribution base JSA -it isn't much £50 - £60 per week (depending on circumstances) but you are entitled to it so claim it.

Apparently, at one time you could not claim this benefit during your lieu of notice period as you had in theory received wages, however, as I understand it now, such money is now deemed as 'capital'. So as soon as you have your confirmed date of redundancy, contact JS and apply from that date.

dickydonkin

Kaiyo
Another thought occurred to me.

If your company does decide to pay only your basic pay for you lieu of notice - remember that your tax code (which will be implemented on your PILON payments) will be based on any benefits in kind that you have such as a car allowance, private medical cover etc, therefore I suspect you will be paying tax for benefits in kind that you will not actually be receiving.

It may be your contract only stipulated that the cash aspect of your PILON payments will be your basic salary and other benefits will still be in place.

You must get your employer to clarify what will be included in your pay in lieu of notice payment and question why your contracted perks and benefits are not included if they are withdrawn.