Mortgage payment protection lay off and redundancy.

misslee1888

I just have a quick question to ask.


I have a friend that who was laid off on the 28th March 2009, this was the last day that he worked and was paid. He was then kept on lay off with no money until they paid him off on the 29th May, He was given I weeks lieu of notice and registered with the unemployment agency at the beginning of April.
As soon as he got laid off he informed his mortgage protection company and they said that they could not pay him any money until he was unemployed. They are only going to give him cover form the 3rd July. Does this seem right, surely it should kick in as soon as he is laid off?

I have put the timeline below: Any advice would be appreciated.

· made redundant 29th May 2009 - Last day of work before lay off 28th March
· Date of registered as unemployed in April
· Lieu of notice 3rd June
· 30 Day waiting period to 3rd July
· Payment of mortgage protection from 3rd July

Thanks

Lisa

McKneff

Most of these insurance people have a kick in time, some its 28 days, some its 90 days. Depends on his terms and conditions but it is normal practise

misslee1888

I know about the 30 days kick in period, but they are taking it from the unemployment date and not the lay off date. He was laid off for nearly 2 months without pay with a promise that he would keep his job and then he got paid off. Should the date not start from the last day that he got paid and the 30 days start from there?

Pete111

I'm not very familiar with this type of working arrangement but you say they didn't pay him any wages and asked him not to work after the 28th March? Sounds like that is the end of employment date to me. I'm pretty sure being 'laid off' is deemed the same as termination in employment law but happy to be corrected here.

If they were asking him to take garden leave (and paying him his notice without his coming into work) then that's different but to my mind effective unemployment occurred in March, even though the redundancy/PILON payment was delayed.

The problem here is that we are not really talking about employment law but contract law as it's the insurer rather than a tribunal he needs to convince... I assume he has already pleaded his case with them?

misslee1888

I am not sure how well he is communicating with them. He is very shy and I don think that he would make his case very well. I may have to get him to give them permission to speak to me and give them a call myself.

getmore4less

Pete111 wrote: »

I'm not very familiar with this type of working arrangement but you say they didn't pay him any wages and asked him not to work after the 28th March? Sounds like that is the end of employment date to me. I'm pretty sure being 'laid off' is deemed the same as termination in employment law but happy to be corrected here.

If they were asking him to take garden leave (and paying him his notice without his coming into work) then that's different but to my mind effective unemployment occurred in March, even though the redundancy/PILON payment was delayed.

The problem here is that we are not really talking about employment law but contract law as it's the insurer rather than a tribunal he needs to convince... I assume he has already pleaded his case with them?

Companies can lay off(with or without pay) or put workers on short time I think it needs to be explicit in the contact though and is not a default right.

Acas has a summary http://www.acas.org.uk/index.aspx?articleid=814

Used in factory and shops (eg: car industry)

So if there was no contractual layoff without pay I think they may have a claim against the employer.

It also looks like they may not have done the dismisal properly.

If you have layoff/short time clauses in your employment contracts then you need to make sure that any insurances cover these, I bet most people don't consider this.

Mrs_Bumble

When exactly did your friend register as unemployed with the Job Centre, the date of unemployment is usually taken from this point as it is then that you are declaring official unemployment, which is why it is always so important to register with the job centre asap.

The 30 day waiting period would start from that date and payment would start from day 31.