Redundancy dilemma - please help

simon31leeds

Hi everyone,

My role was made redundant as at 20th January 2011 and since then I have been awaiting my redundancy payment (statutory 6 weeks @ £380 for 6 1/2 years I have been there).

My ex-employer has now advised that he is going to switch the company from an LLP to a Limited company and therefore, I should seek the redundancy money from the government scheme, but they know they have promised me the money (I don't see it as a promise but more as an obligation) so they will pay me from their personal money but want me to pursue the government scheme angle and pay them back anything I receive back from the government.

I am worried on many counts, a) because without the redundancy payment I only have one months mortgage and bills payments saved that I have left, so come start April I will have nothing if I don't have the redundancy payment by then and b) I am worried that even though the person is paying me individually from their own funds, am I committing fraud by then pursuing payment via the government?

I will have to rely on this individual for references for my job applications, so do not want to do anything to compromise my position in this regard but equally, I don't want to do anything illegal.

Any advice and guidance would be appreciated. I am not sure how the government bail out scheme for redundancy works, would I be paid the same as my employer should have paid and how long does it take? I am tempted to do things the appropriate way and if it doesn't take ages, could probably survive until start April or maybe for a little longer with assistance from parents and friends by way of a 'tide-over' loan (if I don't get a job by then) without having to do anything 'dodgy' but would appreciate some advice.

Thanks in advance

Simon

123benji123

Hi Simon

Firstly - you are right in not doing anything illegal.

You have the right to a redundancy payment if you are an employee who has worked continuously for your employer for at least two years and you are being made redundant.

You do not have to claim redundancy pay from your employer, they should automatically pay it to you. If your employer does not give you redundancy pay when you are entitled to it you should write to them asking for payment. If your employer still refuses to pay you or cannot make the payment you could make an appeal to an Employment Tribunal. YOU ONLY HAVE THREE MONTHS minus one day from when you leave your job.

When you are paid a redundancy payment your employer must give you a written statement showing how your payment has been calculated. If your employer fails to give you a written statement you should write to them asking for one. If they still do not provide one you should seek further advice.

If your employer is declared insolvent or cannot pay your redundancy pay, you can apply for a direct payment from the National Insurance Fund. To do this you must first write to your employer asking for your redundancy pay. If they are still unable to pay you then you should fill out a RP1 form available from the Insolvency Service.

If you have been selected for redundancy you may find a new job elsewhere before your redundancy notice period has finished. If you leave the job you are being made redundant from before your notice period has finished, you may lose your rights to a redundancy payment.

If you are dismissed for misconduct with either:

• no notice
• little notice
• a statement from your employer saying they would have been entitled to dismiss you without notice

Then you would not be entitled to redundancy pay. However, your employer must still follow fair dismissal procedures otherwise you might be able to make a claim to an Employment Tribunal. This situation is only likely to occur in gross misconduct cases.

If you feel that you have to resign (eg because of dangerous working conditions or your boss's behaviour), you may be able to claim constructive dismissal.

I don’t know if any of this helps. Please let me know how you get on.

Thanks

simon31leeds

123benji123 wrote: »

Hi Simon

Firstly - you are right in not doing anything illegal.

You have the right to a redundancy payment if you are an employee who has worked continuously for your employer for at least two years and you are being made redundant.

You do not have to claim redundancy pay from your employer, they should automatically pay it to you. If your employer does not give you redundancy pay when you are entitled to it you should write to them asking for payment. If your employer still refuses to pay you or cannot make the payment you could make an appeal to an Employment Tribunal. YOU ONLY HAVE THREE MONTHS minus one day from when you leave your job.

When you are paid a redundancy payment your employer must give you a written statement showing how your payment has been calculated. If your employer fails to give you a written statement you should write to them asking for one. If they still do not provide one you should seek further advice.

If your employer is declared insolvent or cannot pay your redundancy pay, you can apply for a direct payment from the National Insurance Fund. To do this you must first write to your employer asking for your redundancy pay. If they are still unable to pay you then you should fill out a RP1 form available from the Insolvency Service.

If you have been selected for redundancy you may find a new job elsewhere before your redundancy notice period has finished. If you leave the job you are being made redundant from before your notice period has finished, you may lose your rights to a redundancy payment.

If you are dismissed for misconduct with either:

• no notice
• little notice
• a statement from your employer saying they would have been entitled to dismiss you without notice

Then you would not be entitled to redundancy pay. However, your employer must still follow fair dismissal procedures otherwise you might be able to make a claim to an Employment Tribunal. This situation is only likely to occur in gross misconduct cases.

If you feel that you have to resign (eg because of dangerous working conditions or your boss's behaviour), you may be able to claim constructive dismissal.

I don’t know if any of this helps. Please let me know how you get on.

Thanks

Thanks for the advice benji - I had checked that info out from the Direct.gov website at the time I was advised of the redundancy but good to refresh my mind again on the key points.

I guess I need to check if my ex-employer has got an IP to deal with them closing down the old company and pursue them to fill in the relevant forms if necessary for the government scheme.

I wondered if anyone knows rough turnaround timescales on the scheme, where a company is making themselves insolvent but then setting back up immediately afterwards (in this case switching from an LLP partnership to a company) as it indicates on the supporting documents to the RP1 form from the insolvency service that it'll take a while, but wonder if anyone has any practical experience of the turnaround times.

Cheers for looking

Simon

Crafty_Toots

Hi Simon

Sorry to hear that you're in this position - sounds very much like mine.

One very important thing to bear in mind, as I have found from talking to various helplines etc:

Your employer may say that the company is insolvent, and this may be very true. However, there is a world of a difference between the casual use of the word insolvent, and being LEGALLY declared insolvent.

My employer has advised me that while they deem the company to be insolvent, there is not IP involved, nor is there likely to be, since they effectively ceased trading on 31st January.

As the company is not LEGALLY insolvent, with an IP or similar having been engaged, then you will find you CANNOT make use of the RP1 form to claim funds from the National Insurance Fund. What you have to do is lodge a formal complaint/claim with the Employment Tribunal (you can do this online) and their normal investigation process must be followed. This includes writing to your employer for more information and giving them 28 days to reply.

Once they have completed the investigation process and held the tribunal hearing, they will make a determination as to whether your claim should be upheld. If it is awarded in your favour, the employers will be told to pay up. If they can't, or won't, then you make use of the RP1 form and claim from the National Insurance Fund.

I was told by Employment Tribunal folks that they are so busy at present, it is anticipated that it will take approximately 7 months from complaint to hearing. Add on a bit of extra time for them to issue the award. There will then be a lie period during which payment should be forthcoming. When it's not, your NIF claim will take around 3 weeks to process. So I reckon, when all is said and done, about 10 months on average, presuming the Tribunal award in your favour.

Sorry to be the bearer of bad news, but I was glad to be given this information so at least I know what to expect, and hopefully it will save you some expended energy along the way.

For what it's worth, what they're telling you to do re paying you then you claiming and giving the money back is an absolute swindle. Employers experiencing problems in paying redundancy money can apply to the RPO for help - they can arrange to have the funds paid to the employee and arrange a repayment scheme with the company going forward.

Best of luck.

Toots x

simon31leeds

Hi Toots,

Thanks very much for these really great comments and detail - I wouldn't have known half of this without like you say, lots of wasted expended energy!

I have asked for the IP details today by e-mail and surprise surprise no response as yet, so I plan on bombarding them on the phone tomorrow to get to the bottom of the issue - doesn't help that they are a firm of Solicitors so good at avoiding the detail when needed!

Just one question - you mention RPO that they can get help off and set up a repayment scheme but I don't know who/what RPO is/are. Please could you advise?

Many many thanks again - really appreciate the pointers in the right direction :-)

Cheers

Simon

Crafty_Toots wrote: »

Hi Simon

Sorry to hear that you're in this position - sounds very much like mine.

One very important thing to bear in mind, as I have found from talking to various helplines etc:

Your employer may say that the company is insolvent, and this may be very true. However, there is a world of a difference between the casual use of the word insolvent, and being LEGALLY declared insolvent.

My employer has advised me that while they deem the company to be insolvent, there is not IP involved, nor is there likely to be, since they effectively ceased trading on 31st January.

As the company is not LEGALLY insolvent, with an IP or similar having been engaged, then you will find you CANNOT make use of the RP1 form to claim funds from the National Insurance Fund. What you have to do is lodge a formal complaint/claim with the Employment Tribunal (you can do this online) and their normal investigation process must be followed. This includes writing to your employer for more information and giving them 28 days to reply.

Once they have completed the investigation process and held the tribunal hearing, they will make a determination as to whether your claim should be upheld. If it is awarded in your favour, the employers will be told to pay up. If they can't, or won't, then you make use of the RP1 form and claim from the National Insurance Fund.

I was told by Employment Tribunal folks that they are so busy at present, it is anticipated that it will take approximately 7 months from complaint to hearing. Add on a bit of extra time for them to issue the award. There will then be a lie period during which payment should be forthcoming. When it's not, your NIF claim will take around 3 weeks to process. So I reckon, when all is said and done, about 10 months on average, presuming the Tribunal award in your favour.

Sorry to be the bearer of bad news, but I was glad to be given this information so at least I know what to expect, and hopefully it will save you some expended energy along the way.

For what it's worth, what they're telling you to do re paying you then you claiming and giving the money back is an absolute swindle. Employers experiencing problems in paying redundancy money can apply to the RPO for help - they can arrange to have the funds paid to the employee and arrange a repayment scheme with the company going forward.

Best of luck.

Toots x

Crafty_Toots

Sorry Simon, I had a couple of thoughts after I posted actually!

The RPO is the Redundancy Payments Office who are the people who process claims from the National Insurance Fund (NIF).

Also, worth letting you know that the tribunal form you want if you have to start a complaint process is an ET1, which as I say you can complete and submit online.

If I think of anything else I've found out that might be helpful, I'll let you know, but if you have any questions in the meantime don't be afraid to ask - I'm by no means an expert, posted my own thread on this earlier on this week but not much joy so I did my own digging!

Toots x

simon31leeds

Brilliant - thanks so much, now looking on the Insolvency Service website at the info they give on the Redundancy Payments Office and their scheme. I will suggest this as an alternative to going down a tribunal or RP1 / Insolvency Practitioner route if I can establish how the land lies tomorrow.

Cheers again and wishing you the best of luck in pursuing your issues successfully too

Cheers

Simon

Crafty_Toots wrote: »

Sorry Simon, I had a couple of thoughts after I posted actually!

The RPO is the Redundancy Payments Office who are the people who process claims from the National Insurance Fund (NIF).

Also, worth letting you know that the tribunal form you want if you have to start a complaint process is an ET1, which as I say you can complete and submit online.

If I think of anything else I've found out that might be helpful, I'll let you know, but if you have any questions in the meantime don't be afraid to ask - I'm by no means an expert, posted my own thread on this earlier on this week but not much joy so I did my own digging!

Toots x

simon31leeds

Quick update - spoke to my ex-employer today and they advised that they do not have funds to pay my redundancy and have asked their accountant to appoint an Insolvency Practitioner but not yet appointed.

I have been advised this should be done this week or next week, but until then I can't get the IP details to progress my claim through the National Insurance fund.

My role was made redundant effective 20th January 2011, am I right in interpreting I only have 3 months from that date to raise any issues with an Employment Tribunal? This will mean I must get IP details by 20th April 2011 at latest to lodge an appeal via a tribunal - is this right?

Thanks in advance

Simon