Redundancy and cheating me out of money

greenflamingo_2

Hi all
I wasmade redundant on 30th January; this was the notice date and also the termination date. The company said as they were in breach of contract PILON would be paid for the 13 weeks notice I should have been given. However..... they then said that holidays accrued during the notice period approx 6 days and also 13 weeks pension contributions the company should have paid into the pension scheme will not be paid.
There is nothing in my contract which gives the company a get out and as I understand it I have to agree to this PILON, which I am called "damages" as there is no mention of PILON in my contract. I have not agreed even though they were paid today and I have lodged my protest and claim for the above items. The company have said I will have to take them to an ET to get recompense!

I was not given the option to work my notice and I am on maternity leave anyway so couldnt work it even if I wanted to. They then said that I could work it hypothetically but that SMP would be deducted from my 13 weeks wages as if I were there normally so I wouldnt benefit financially anyway. Because they are in breach of contract they have benefitted financially from this - how can this be right?

Am I right to launch a claim via an ET for Breach of Contract and Unlawful Deduction of Wages?

Maxjessdru

I think you need to think about the cost benefit of being paid damages instead of having a notice period. If they classed the payment as "payment in lieu of notice (PILON)" then the whole of this payment to you would be subject to tax and national insurance contributions. By paying to you as damages, the Revenue do not take tax and national insurance payments out of this sum. So, in effect, you are getting more money that way. It may be worth you working out how much the cash benefit of the holiday and pension entitlement would be opposed to the amount of tax/NI payable - it could be that you are actually gaining money by them doing it this way

honeypop

This is correct, if they paid you the holiday owed and pension etc, then the WHOLE amount including notice pay would be liable for Tax and NIC, so you need to work out which way you are better off before proceeding.

greenflamingo_2

Thanks for posts.

My employer has deducted tax and NI out of the "damages" which they said they had to pay even though I told them it was not liable for tax and showed them a printout from one of the Inland Revenue pages clearly stating that it wasnt classed as "wages".

So double whammy they have cheated me out of over £1000K in benefits and to add insult to injury have deducted quite a large amount of tax out of it as well.

Apparently they spoke to the Inland Revenue who told them that it was possible that I could reclaim the tax but I wouldnt be able to claim this tax back whilst I was receiving SMP as my employer could not issue my P45 whilst they were paying me SMP. In effect I have to wait 6 months before I can attempt to claim the tax back!

Is this correct or can I write to the Inland Revenue with perhaps my P60 in say April 09 and try and get it back?

honeypop

Yes you can write to them in April with the latest P60 and they will work it out from there.