We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Been given notice today :-(

13

Comments

  • dpassmore wrote: »
    Of course, if you have no intention of claiming on any insurance, it is one less concern to help you decide on your options.

    Hi dpassmore,

    That´s a very valid comment and I am grateful for it. However, I do not have any form of insurance that I could claim on, so, as you said, this isn´t a decisive factor at the moment.

    Again, thank you for taking the time to post your thoughts and comments here!

    SoSad
  • SoSad wrote: »
    W0ould it be wise to discuss a potentially illegal "deal" with them?

    I don't mean to appear negative, but if you're on £70k a year and they are offering you a deal worth £17500, perhaps you should take proper legal advice rather than taking advice here.

    As an employment solicitor myself, I have seem some appalling advice given on this forum. Usually by HR people with a vague grasp of employment law.

    That's not a dig at anyone on this thread. I haven't had time to read their posts.
    I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.
  • Having read the thread one thing to note is that they deal they are offering you is not illegal. Feel free to discuss it with ACAS.

    Essentially, it's a means to end your contract of employment.

    You have a three month notice period in your contract. For them to end your contract of employment you are entitled to three months notice. They do not want to abide by the contract of employment. Therefore, they are offering three months pay as a lump sum.

    Whether the lump sum is taxable will depend on whether your contract of employment allows for such a lump sum to be paid i.e. a payment in lieu of notice or PILON clause. If it does then the lump sum payment is a contractual payment and is potentially taxable. If there isn't such a clause then the lump sum payment is outside of your contract of employment and is potentially tax free.

    If you refuse the offer, the company may go through a redundancy consultation/selection procedure. The result of which could be your dismissal. You would then be entitled to three months notice from the date of dismissal.

    If you take the offer, they are likely to request that you sign a compromise agreement preventing you bringing any claims against the company. The deal is that you get this money tax free and get to leave at the end of the month. The alternative is that you force them to go through the procedure and potentially they make you work your notice.

    If I were you I'd ask for six month salary to go now and negotiate down to four or five months' salary.
    I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.
  • SoSad_4
    SoSad_4 Posts: 10 Forumite
    If I were you I'd ask for six month salary to go now and negotiate down to four or five months' salary.

    Thanks for your post Ewarwoowar2!

    With regard to the last paragraph in your reply (quoted above), I don´t understand why they, cash-stricken as the company is, would offer anything in excess of the 3 months salary that they are contractually obliged to pay? :confused:

    SoSad
  • becasue

    1) if you refuse the offer it will take them a month or two to dismiss you fairly on grounds of redundancy. You would then be entitled to your notice pay. Therefore, if they want you to go quickly and quietly, they need to pay you extra.

    2) they will want you to sign a comp agreement, signing your rights away to bring a claim. If they want you to do that, don't you want something in return?
    I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.
  • SoSad

    I don't see anything illegal or immoral in what the company are offering you, provided they are offering a compromise agreement.

    If they offer a CA then it's not redundancy. Essentially it's a mutual agreement to terminate your contract of employment in return for which the company will pay you damages. The first £30k is paid tax free. It's worth noting that this tax free amount is not limited to "redundancy pay" - it applies to any amount paid as compensation for loss of (office) job.

    Ask if they're intending to offer a CA. If so, then post back and we can give advise based on that scenario.

    HTH
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • SoSad

    I don't see anything illegal or immoral in what the company are offering you, provided they are offering a compromise agreement.

    If they offer a CA then it's not redundancy. Essentially it's a mutual agreement to terminate your contract of employment in return for which the company will pay you damages. The first £30k is paid tax free. It's worth noting that this tax free amount is not limited to "redundancy pay" - it applies to any amount paid as compensation for loss of (office) job.

    Ask if they're intending to offer a CA. If so, then post back and we can give advise based on that scenario.

    HTH

    This is a good example of why you need proper advice, rather than posting on a message board:

    1) You can still be made redundant and have the termination of your employment confirmed in a compromise agreement. This might be done where the employer wants you to sign up to (further) restrictive covenants. Whether you are dismissed for reason of redundancy or not is a question of fact.

    2) Just because the compensation payment is contained in a compromise agreement does not mean the first £30k is tax free. In fact it doesn't matter whether a compromise agreement exists or not. The question, put in simple terms, is whether the payment is genuine compensation rather than a contractual payment, a payment for consideration (such as entering in to restrictive covenants or a 'golden goodbye'.
    I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.
  • becasue

    1) if you refuse the offer it will take them a month or two to dismiss you fairly on grounds of redundancy. You would then be entitled to your notice pay. Therefore, if they want you to go quickly and quietly, they need to pay you extra.

    Why would it take them a month or two to dismiss me fairly? The contractual agreement says that I can be made redundant at the end of any given month with 90 days notice. So this week they told me that they want me to leave with effect of March 31st. They don´t want to / They cannot afford to pay me any longer than that agreed notice period. This is the situation as of this week.

    So what do you mean when you say it will take them 1-2 months to dismiss me?

    I will try to speak to a lawyer soon but, strangely, I am now on a business trip. Yes, highly motivated as I am. ;-)

    Thank you!
    SoSad

  • Just because the compensation payment is contained in a compromise agreement does not mean the first £30k is tax free. In fact it doesn't matter whether a compromise agreement exists or not. The question, put in simple terms, is whether the payment is genuine compensation rather than a contractual payment, a payment for consideration (such as entering in to restrictive covenants or a 'golden goodbye'.

    And this is exactly my concern. Since the agreement between the company and me only says that I will be entitled to 90 days notice (and pay), it seems to me that without "faking" a new agreement, HMRC would consider a lump sum payment as taxable income and not a real compensation for losing my job. :confused:

    SoSad
  • SoSad wrote: »
    Why would it take them a month or two to dismiss me fairly? The contractual agreement says that I can be made redundant at the end of any given month with 90 days notice. So this week they told me that they want me to leave with effect of March 31st. They don´t want to / They cannot afford to pay me any longer than that agreed notice period. This is the situation as of this week.

    So what do you mean when you say it will take them 1-2 months to dismiss me?

    The *should* go through a proper redundancy process: consultation, identify pool of employees at risk, selection procedure, dismissal hearing, etc... If they don't then the dismissal is likely to be unfair.
    I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.2K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.3K Spending & Discounts
  • 240.8K Work, Benefits & Business
  • 617K Mortgages, Homes & Bills
  • 175.6K Life & Family
  • 254K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.