Redundancy whena company folds

UZ1307

Hi,

My first post so please be gentle!!

The company I am working for is folding at the end of september and we are all obviously being made redundant.

I am 33 years old and have worked here for 15 years (the company has been taken over twice in that period but both times my employment was transferred by tupe) My gross pay is 18000 pa.

I have been on the redundancy calculator which says I am entitled to £4875 statutory redundancy pay, yet a colleague has said I am also entitled to 1 weeks notice pay for every year I have worked here (after the first 2) on top of the statutory pay, which calculates to £9750. Can anyone tell me if this is correct or am I just entitled to the statutory redundancy.

Thank you

SarEl

UZ1307 wrote: »

Hi,

My first post so please be gentle!!

The company I am working for is folding at the end of september and we are all obviously being made redundant.

I am 33 years old and have worked here for 15 years (the company has been taken over twice in that period but both times my employment was transferred by tupe) My gross pay is 18000 pa.

I have been on the redundancy calculator which says I am entitled to £4875 statutory redundancy pay, yet a colleague has said I am also entitled to 1 weeks notice pay for every year I have worked here (after the first 2) on top of the statutory pay, which calculates to £9750. Can anyone tell me if this is correct or am I just entitled to the statutory redundancy.

Thank you

I think you are talking at cross purposes! You are entitled to be paid for your notice period but since you already know that you are going to be made redundant it would appear that you have been served notice and that is now running until the end of September. At the end of your notice period you are entitled to redundancy pay - and only to pay in lieu of notice if you haven't been given your notice (or full notice). If you haven't been given notice then your friend is indeed correct and you are entitled to both. But if you think this is the case and you aren't getting paid your notice, you must take proper advice on this. CAB should be able to help with this one.

markandkate

Notice pay. If your emplyer brings your contract to an end you are entitled to one weeks salary for each year worked to a maximum of 12 weeks. You have been emplyed for more than 12 weeks so are entitled to the maximum 12 weeks.

Much will depend on when you were told that the company was closing. If you were told 12 weeks ago then you are not entitled to anything. If you were told less than 12 weeks ago then you are entitled to the balance eg if you were told 8 weeks ago you are entitled to 4 weeks salary in lieu of notice.

Any salary in lieu should be free of tax and NI up to a mximum of £30,000.

SarEl

markandkate wrote: »

Notice pay. If your emplyer brings your contract to an end you are entitled to one weeks salary for each year worked to a maximum of 12 weeks. You have been emplyed for more than 12 weeks so are entitled to the maximum 12 weeks.

Much will depend on when you were told that the company was closing. If you were told 12 weeks ago then you are not entitled to anything. If you were told less than 12 weeks ago then you are entitled to the balance eg if you were told 8 weeks ago you are entitled to 4 weeks salary in lieu of notice.

Any salary in lieu should be free of tax and NI up to a mximum of £30,000.

This is not entirely true. Whether salary in lieu is free of tax and NI (which is not the same thing as being entitled to gross rather than net pay) depends upon your contractual terms and the effective date of terminatiuon. It is far from being automatically tax free.

NevG

I was under the impression that pay in lieu of notice IS taxed as normal pay it is the redundancy payment of up to £30000 that isn't taxed.

I received statuary redundancy pay of £7461 that has not been taxed a payment of £4974.50 pay in lieu of noticed which is taxed at the normal rate and holiday pay of £351.56 also taxed in the normal way.

When I go through it on the DirectGov site it is correct, only redundancy pay is not taxed , the rest is except under certain circumstances. Trust the tax people to make it unclear:think:

Where that process shows that a PILON(Pay In Lieu Of Notice) is an emolument from an office or employment, it is taxable under Section 19 ICTA 1988. Section 148 ICTA 1988 is relevant only where Section 19 ICTA 1988 does not apply.

ivylinn

UZ1307 wrote: »

I have been on the redundancy calculator which says I am entitled to £4875 statutory redundancy pay, yet a colleague has said I am also entitled to 1 weeks notice pay for every year I have worked here (after the first 2) on top of the statutory pay, which calculates to £9750. Can anyone tell me if this is correct or am I just entitled to the statutory redundancy.

Thank you

Some companies pay more than the statutory minimum because of contractual or union agreements.
Does your company have an agreement for an enhanced redundancy package that is tied to length of service?

UZ1307

Thanks for your replies.

So I am assuming as I was told on Monday that the company is folding in 6 weeks, I am also entitled to ANOTHER 6 weeks (net) pay on top of the 13 weeks statutory redundancy gross pay.

Who pays me this money and who do I need to speak to get it? as the company is folding with debts so there is no way I'm going to get it off my employer as I'm assuming the creditors/administrators will get their 'cut' 1st.

Thanks again!

UZ1307

ivylinn wrote: »

Some companies pay more than the statutory minimum because of contractual or union agreements.
Does your company have an agreement for an enhanced redundancy package that is tied to length of service?

No Ivylinn. It is only a small company with 10 employees. No extras or pensions or unions etc.

ivylinn

UZ1307 wrote: »

Thanks for your replies.

So I am assuming as I was told on Monday that the company is folding in 6 weeks, I am also entitled to ANOTHER 6 weeks (net) pay on top of the 13 weeks statutory redundancy gross pay.

Who pays me this money and who do I need to speak to get it? as the company is folding with debts so there is no way I'm going to get it off my employer as I'm assuming the creditors/administrators will get their 'cut' 1st.

Thanks again!

http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy/DG_10029836

If a company can't afford to pay it comes from the national insurance fund.
The information is under the insolvent employers section.

UZ1307

Thank you for your time Ivylinn. I will look into it.:T

markandkate

An "emolument" is defined as salary or wages. Pay in lieu of notice is a compensatory payment for the employers breach of contract and is therefore NOT an emolumnet and is not treated the same for the purposes of Ni and Tax