Redundancy and Notice

TheLordDave

Hi,
I'm a long time lurker first time poster and am seeking some advice.

My company is going through a redundancy round currently.

There is a lot of confusion from HR about my entitlement to redundancy payments and notice periods and I'm worried they are trying to pull a fast one.

I am entitled to 3 months notice in my contract with 3 years service

The company have 2 offers on the table:
1) Statutory Redundancy and PILON of any unworked notice
2) 6k Enhanced Redundancy Payment

option 1 works out as about 8.5k but the PILON will be taxed.
option 2 works out at 6k but without tax and any notice.

If I work any of my notice period the final payment for option 1 reduces accordingly.


My problem is that the company is arguing that i should take option 1 as on paper it works out as more, I disagree.

Would i still be entitled to my notice period if i take option 2?

In my mind i am still entitled to my notice period if i take option 2.
I believe I am entitled to the 6k enhanced payment plus 3 months PILON if i am not required to work my notice, or to work my notice if required.

The company seem to be saying that i can take either package, which ever is greater but am not entitled to my contractual notice period if i take option 2.

Can anyone advise on the legality of this? are they allowed to remove my notice period like this?

I have a meeting booked in tomorrow with the head of HR to discuss this but would appreciate some advise as to the best route to take.

Thanks
Dave

TheLordDave

I realize that it hasnt been long since my initial post but i would really appreciate anyones opinion as i have a HR meeting tomorrow and want to be prepared.
Thanks

unholyangel

AFAIK, it is possible if both parties agree and providing you are being paid more than your notice period (3 months) plus redundancy entitlement (which i think is 0.5 weeks for anyone over under 22, 1 week for every year between the ages of 22 and 40 and 1.5 weeks for every year over the age of 41). Of course that is the statutory minimum, your contract may allow for a better payout.

try here for some helpful advice:
http://www.worksmart.org.uk/rights/redundancy

getmore4less

I think option 2 could come under scrutiny by HMRC since you have 3 months notice and you are mutualy agreeing to reduce this for a payment.

It might also need a proper Comprimise Agreement


IS PILON in your contract? or have the company always offered PILON
that can make a difference to the tax.

With 1 you want to insist that PILON is the full three months even if they want you to work NO reduction because you work.


Remember if they pay this in the next tax year then the tax could be quite low if you don't find work.

Don't forget unused accrued holiday

TheLordDave

Thanks for the responses.

PILON is stipulated in my contract and i understand the tax implications of this.

The main issue is that the standard enhanced package is 3 weeks pay per year of service. I have 3 years service so would get 9 weeks pay.

This works out at about 5600. We were then issued another redundancy notice as our business merged with another. This letter stated that the minimum redundancy payment would be 6k for all employees regardless of length of service.

The other offer with statutory redundancy and payable unworked notice is still availiable.

But.... my local hr are saying that if i take the 6k redundancy offer then that is instead of any notice/PILON provision in my contract and that i cant have both a redundancy payment and a PILON payment as they believe this is a "double whammy".

From my reading into redundancy law, I believe that if i took this 6k option then i am also contractually entitled to my 3 month notice period.

They are suggesting that the statutory redundancy option is best for me but by my calculations the 6k option is the best.

eg

I think it should be
Stat + Unworked Notice(PILON)
or
6k + Unworked Notice(PILON)

they are saying it should be
Stat + Unworked Notice(PILON)
or
6k

Surely the payment of PILON or entitlement to work out my notice should not change by taking the enhanced redundancy package?

Cheers

getmore4less

I am enclined to agree with you if there was no mention of the enhanced package requiring you to give up notice when they proposed.

You can claim HR have made this up and they have no evidence to back up the propsed payouts.

What is in the letters/emails about this before this new proposal?
If nothing about giving up notice then stick it out

When does your 4th years come up, is it worth trying to hang on for this?

TheLordDave

Im only just into my 4th year so no chance of holding on till then.

I just spoke to ACAS and they stated as you have, that the company is free to attach any conditions to the 'enhanced offer' they like, such as the waiving of notice.

The original letters are a bit confusing and read as if multiple documents have been merged, with terms not matching from one paragraph to the next.

There is a paragraph that essentially states:
The severance payment is full and final payment and is inclusive of notice period, holidays and benefits.

Yet these other items were not added to the severance quote. The quote just being 3weeks x 3Years x WeeklyPay.


This is what i found strange as i thought any unused leave would be paid and notice. But it seems the company are free to attach any terms they wish. I need to check if there is a condition that i must attend work naked through out my notice period!

The annoying thing is that the 'enhanced' package is only actually offering the same cash wise as the statutory redundancy plus notice package, actually it works out about 100 quid less.

But if i work any notice under the 6k package, i still get 6k severance.
Under the statutory one if i work any notice this gets deducted from the payment. Plus as the 6k package isnt taxed it wont effect my tax code when i get another job, as the statutory one would.

All in all rather annoying as my possible 6k + 3 months pay is now just 6k. So that will put a bit of pressure on for the job hunting, especially as im planning on setting myself up as a contractor the extra would have come in handy. And more annoying is that my employer is a multi billion pound defence contractor and is quibbling over a paltry amount of money.

Cheers for your replies, I'm still going to try and argue it tomorrow but it looks like I'm out of luck on this one.

getmore4less

from what you say that clause for enhanced looks like full and final.

Have a go, but what you need from any discusions is the date they will give you your termination notice and the date of termination

without these you can't make up your mind which is best..