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Been given notice today :-(
Comments
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Just thought of something Briona - if a compromise agreement is involved, the company will have to pay the OP's solicitors fees. As you will know from CA's, it is vital that a solicitor is involved on the employees behalf.
My compromise agreement was weighed heavily in favour my former employer, in fact the only thing the document compromised was me!
My solicitor (of my choice and paid for by the company) sorted it out though.
I think most CAs are weighted VERY heavily in the employer's favour...If I don't respond to your posts, it's probably because you're on my 'Ignore' list.0 -
Couple of clarifications: I think you are correct about the ineligibility for the basic redundancy pay (since the OP worked for less then 2 years) but perhaps it's something that the employer can still decide to count in to the final pay off if they choose to? I don't know the rules about this particular aspect..... However, I think what the OP will be getting is the payment in lieu of notice, and that payment will be contractually based (already mentioned in her contract). Which means that even if OP worked for a short period of time if their contract says (and the board members of the firm have decided that certain internal redundancy rules will apply) that they'll be given 3 months notice, - than the firm can offer to pay the lump sum of that notice, instead of asking the employee to work off that period.
And yes, that payment is indeed tax free. The firm will use a specific tax code that will ensure that it is so and that the OP will not have any problems in the future. I can't remember the exact amount that is the max that can be tax free but it might be in the region of £16,000.
All this has to be documented in the notice of redundancy letter, and I would still urge the OP to have a look through some help guides available on the net. I know that it's very upsetting time but it's better to know what to do!
Only redundancy payments up to £30,000 can be potentially tax free. The reality is that the OP is not entitled to redundancy payment and any payment under whatever guise, is potentially liable for tax.
PILON is liable for tax (although some contracts of employment can get around this, however I am unsure of the requirements and implications).
A company can pay whatever they like within legal guidelines, however, they cannot class a payment as redundancy with the accompanying tax free benefits when it isn't and the OP is not entitled to it.
Once the details have been put into writing by the employer (which would be surprising), hopefully the OP can get back to the forum and clarify what the payment is actually going to consist of.0 -
That's true! But I think – and I'm happy to be corrected if I'm wrong – they are only obliged to pay £150. My friend's solicitor seemed to think £250 was nearer the mark, but the employer wouldn't budge from £150.
I think most CAs are weighted VERY heavily in the employer's favour...
I had a 'budget' of £250:00 3 years ago, but I am not sure if there is a 'set fee' for such a service.
Would £150.00 pay for a Solicitors lunch?0 -
I don't know if this may help - but on my home insurance policy I have family cover (or it may come under different names) basically it means you have access to a solicitor for free to discuss matters like this - perhaps it may be worth checking your policy and seeing if you have that and then you could get some legal advice on this?0
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The company employs roughly 40 people - they are non advertised at the moment, at least
the consultation period, no such thing has happened. My boss and CEO asked me for a meeting earlier this afternoon and then he told me about the redundancy. That´s all!
Oops, I wasn´t aware of that! And neither was my boss, it would seem. As I wrote above, he called me in and broke the news. If that constitutes a break of the law: a/ How can I use it to my adantage and b/ what do I have to do now?
Despite being very disappointed and emotional right now, I genuinly believe that at this moment, they are really trying to help financially wherever they can. I am still very cautious about this but the offer seems genuine.
SoSad
I'm sure others that know more details will correct my advise (as already happened) but in a nutshell - the reasonable consultation period must take place (if it was more then 20 people made redundant then that consultation would have to be done with the whole group in a kind of 'open meeting' but this does not apply to you). This is a link where you can read more about this matter: http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy/DG_10029835
I think knowing about this will put you in a position to negotiate (if that is what you would like to do - you'll know better about what route to take when you have a good think about it and understand the process a little better) whether the pay, the benefits (e.g. if you have BUPA you could perhaps ask them for an extension to cover it for longer then 3 months), etc. I know this is a very hard thing to imagine to do, especially since you're saying that your employer is very nice indeed, but I'm just listing few options. Also, do make sure you get a copy of standard references before you leave.
I kind of hoped you were going to say that the firm is huge ;-) as it would have been easier to look for an alternative employment within but since they're not advertising anything at the moment this doesn't seem to be an option.
Also, I have just checked this - the max tax free amount is £30,000 but it must be paid under certain conditions - have a read here more about this http://www.thompsons.law.co.uk/employment-rights/your-employment-rights.htm The link is to a law firm, but they explain the redundancy process quite well.
I really hope that this process won't be as distressing as it was for me; I just wished I knew all this stuff before I was made redundant :-) but hey, we all learn by challenges we go through.
Pls do ask if you need more links or some other help :-)0 -
W0ould it be wise to discuss a potentially illegal "deal" with them?
NO - but that is only my view.
You need to look at how such a deal could potentially affect you in the months/years ahead.
If you are confident of: 1) getting another job straight away 2) do not intend claiming any benefit 3) Not claiming on mortgage protection/loan insurances, then only you could consider any underhand offers.
But don't forget if anything goes belly up such as cheques bouncing, discrepancies or non payment of 'agreed' money, you have not got a leg to stand on really.
If you are 'caught out', do you expect your former employer to back you up?
Only you can decide.0 -
Only redundancy payments up to £30,000 can be potentially tax free. The reality is that the OP is not entitled to redundancy payment and any payment under whatever guise, is potentially liable for tax.
PILON is liable for tax (although some contracts of employment can get around this, however I am unsure of the requirements and implications).
A company can pay whatever they like within legal guidelines, however, they cannot class a payment as redundancy with the accompanying tax free benefits when it isn't and the OP is not entitled to it.
Once the details have been put into writing by the employer (which would be surprising), hopefully the OP can get back to the forum and clarify what the payment is actually going to consist of.
Yes, you're right about the £30k mark; I completely mistook the figure for something else I was having a look at today. Better for the OP!
I've got this quote from the lawyer's site that I've provided the link to:
"Generally, the first £30,000 of a payment made as compensation for loss of employment is tax-free. Redundancy payments up to £30,000 (both contractual and statutory) are usually tax-free. Payments in lieu of notice are tax free, provided that the employer does not have a contractual right to make a payment in lieu of notice and, in a redundancy situation, provided that the employer does not usually make a payment in lieu of notice as a matter of course. Benefits such as continued use of a mobile phone or company car are usually tax-free."
I have to say that a good solicitor is always useful, and it would be great if the OP's 'notice of redundancy' letter indicated that there will be a compromise agreement (SoSad - that would be the contract you'd sign upon leaving the firm that would bind you to some terms even if you won't longer work for the firm, e.g. confidentiality, etc. but I really don't know whether every firm has these or not....), in which case they will stipulate the amount they'll pay (on average I think it's £500, which would be enough to get a good advice as to whether it's worth getting a negotiations started).
A good lawyer, if there is a need for one (or if OP decides to employ one) will recoup the charges (e.g. their charge that could be approx. £200 per hour) back from the actual employer - but this is never guaranteed.0 -
Employers are legally obliged to pay for a solicitor to act on your behalf re CAs. It is important that you choose someone who specialises in employment law however. With regard to costs, it very much depends on the strength of any potential claim against your employer and your solicitor's negotiation ability - and their knowledge of employment law.
My employer offered to pay £200 towards the cost of my finalising a CA. My solicitor advised them that given the circumstances (potentially, I had a significant claim against them) he would be prepared to cap his costs at £5k. I held out and they paid up.
QB
PS - I ought to make it clear that the £5k reflected the solicitor's time based costs in negotiating an acceptable settlement, not merely signing off a draft CA. However, it was a cost that rightly, my employer ended up having to pay.
And by the way, good luck. I know that redundancy is a horrible situation to be in.0 -
SoSad - Something else you may need to consider is that if you do attempt to claim redundancy or loan protection insurance following your 'redundancy', this could potentially be deemed as fraud as your 'redundancy' is not technically a redundancy as stipulated in the policy.
Furthermore, if your former company state either in writing to you or the insurance company that you were made redundant, they could also be deemed as defrauding the insurance company.
The reason this came to mind was during my situation, some employees were contemplating accepting voluntary redundacy, however, the company refused point blank to sign loan protection insurance claim forms and state that the 'volunteers' had been made redundant on a COMPULSORY basis as this could be deemed as fraud by both parties.
The implications of insurance fraud - even if it is attempted - can be severe as you will likely be blacklisted on the insurers database making it unlikely you would get insured for anything.
Of course, if you have no intention of claiming on any insurance, it is one less concern to help you decide on your options.0
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