enhanced redundancy scheme???

D1zzy

A friend is about to be made redundant (his job goes) . His employer always pays > than statutory redundancy pay, although this is not contractual nor is the calculation of the enhancement defined. (though he believes a formula for the calculation exists).
Due to his age and circumstances there are a number of questions surrounding his redundancy, but I thought I'd ask them individually.
So Q1:-
My understanding is that enhanced schemes nust mirror statutory schemes - does the payment he will receive constitute an "enhanced scheme" in legal terms- or because it is not defined or contractual does it fall outside the definition of an "enhanced scheme" and hence the legal requirements. In other words can the employer just pay on an individual basis whatever they wish above statutory minimum?

Ewarwoowar2

D1zzy wrote: »

My understanding is that enhanced schemes nust mirror statutory schemes -?

No they don't.

Ewarwoowar2

D1zzy wrote: »

does the payment he will receive constitute an "enhanced scheme" in legal terms-

Yes it does, because it's greater than statutory redundancy pay.

D1zzy wrote: »

In other words can the employer just pay on an individual basis whatever they wish above statutory minimum?

Yes they can as long as the method of calculating who gets what is not discriminatory, in particular, unjustifiable age discrimination.

D1zzy

Ewarwoowar2 wrote: »

Yes it does, because it's greater than statutory redundancy pay.
Yes they can as long as the method of calculating who gets what is not discriminatory, in particular, unjustifiable age discrimination.

Thanks-
So they can just pay an arbitrary amount - SP +5K for A, SP +10K for B -no need to apply the same calculation?
See http://forums.moneysavingexpert.com/showthread.html?p=30377275#post30377275 post 24 for a bit more info on the situation

getmore4less

extra info on this thread (replies here please)
http://forums.moneysavingexpert.com/showthread.html?p=30388801#post30388801


key point is he over 65

Another point did he officialy retire or just take the benifits.

D1zzy

getmore4less wrote: »

extra info on this thread (replies here please)
http://forums.moneysavingexpert.com/showthread.html?p=30388801#post30388801


key point is he over 65

Another point did he officialy retire or just take the benifits.

Thanks -sorry about old thread.

1) He's 63 - both pension and retirement age were 60 until new legislation. Pension age is still 60 retirement age is now 65. New legislation came in just before he retired and he chose to take his pension and stay on on a part time basis, so did not retire.
2) No break in employment
3) He believes the scheme was not changed (coming up with a -ive redundancy pay out would support that) - but as it is not a defined scheme and the formula is not disclosed (though it seems widely known) -there is no way to know.

getmore4less

The company may have messed up when they agreed to the retirement benifits.

With the NHS it seems that to take retirement benifits you need to have break in employment to reset continuty of service.
(We did look into this but not in depth)


I think this will need legal advise because age discriminations law is still new. I think clawback for the pension would be problem now.

Have the details of the redundancy package never been shown to any one, it should be part of the redundancy information given to those that are made redundant how their payment is being calculated.


With 2 years to 65 they should have thought this through.
Of all the people to make a claim this is someone with the time and no future job impact.

Problem might be they forgot to cap the enhanced package on service since they had clawback which might now be an issue

D1zzy

Have done some research on EATs and the case of Loxley v BAE systems seems relevant, to the way the formula is applied - but that is still to be re-heard.
Not sure where the legality lies if the formula doesn't work (as in this case) and an employee is just offered an arbitrary ad-hoc amount, that puts him on a different footing from everyone else who is being made redundant.
Taking pension payments into account may be seen as an "objective justification" to prevent windfall payments - but that only seems relevant to those approaching pension age, not those who have continued to work beyond pension age, where, as in this case redundancy means loss of 2 years earnings.
All a bit of a minefield I think

Oh.... - no the calculation has never been published , its been regarded as a discretionary payment, as there is no contractual enhanced scheme, even though those in receipt, compare notes and can work it out, and in this case he was advised, off the record, that application of the formula gave him a -ive amount.

getmore4less

The employer still has the option of withdrawing the redundancy and just retiring him in 2 years.

How part time is he?

D1zzy

getmore4less wrote: »

The employer still has the option of withdrawing the redundancy and just retiring him in 2 years.

How part time is he?

They won't do that, but they could just offer him SRP if he doesn't accept their offer. He does 3/5 - and actually if they applied their formula to his full time pay & then gave him 3/5 rather than calculating on his part time pay, there would be no issue even with the pension clawback. Although it would be an interesting test case to see how pension clawback (if it is still allowed) should be applied to someone already in receipt of a pension.

I think there are 3 issues really
1) Is the pension claw back allowed - or does that constitute age discrimination
2) Is the enhanced formula being applied correctly for a part time worker (off seting a pension based on a fulltime salary, against a potential redundancy amount based on a part-time salary)
3) Does offering an ad-hoc payment (because the formula doesn't work in this circumstance) mean as a part time employee he is being treated differently from full time employees
Thanks for all your input

D1zzy

Ewarwoowar2 wrote: »

Yes it does, because it's greater than statutory redundancy pay.

Done a bit more research, but its still not clear to me.
If its not contractual and there is no defined "enhanced scheme", is it not just discretionary?
When does discretionary become an enhanced scheme by "custom and practice?
Thanks