Redundancy v. going self-employed

mungo_55

Hi,

I've got a bit of a dilemma at the moment. I'm a junior pilot at a small company and they're saying they cant afford our wages any more because one plane needs an overhaul they cant afford and a couple of contracts have been lost ie. no planes to fly, so no income for the company.

In our consultation the other day we were asked to come up with alternatives to redundancy and the alternative I put to them was for me to carry on with office work (I already do a bit) and go part-time (3 days a week). The office work I could do probably wouldnt justify more time than that.

Heres the rub: they're interested in this proposal but also want me to go self-employed. However they arent interested in making me redundant first ie. voluntary switch straight to self-employed and they wont give a guarantee of a time period in which they would take my services. They're just saying they want me to invoice them each month.

To my mind this would leave me very exposed to them just saying they dont want my services quite soon after going self-employed.

I'm minded to go self-employed and part-time, but only if they give me a contract for a certain amount of time in which they would use my services (probably 3-4 months minimum). If they just make me redundant I would only have 3 weeks notice plus 3.5 weeks statutory pay, which means being out of work before Xmas.

Has anybody got any tips on how to approach this ?!

LittleVoice

mungo_55 wrote: »

Hi,

I've got a bit of a dilemma at the moment. I'm a junior pilot at a small company and they're saying they cant afford our wages any more because one plane needs an overhaul they cant afford and a couple of contracts have been lost ie. no planes to fly, so no income for the company.

In our consultation the other day we were asked to come up with alternatives to redundancy and the alternative I put to them was for me to carry on with office work (I already do a bit) and go part-time (3 days a week). The office work I could do probably wouldnt justify more time than that.

Heres the rub: they're interested in this proposal but also want me to go self-employed. However they arent interested in making me redundant first ie. voluntary switch straight to self-employed and they wont give a guarantee of a time period in which they would take my services. They're just saying they want me to invoice them each month.

To my mind this would leave me very exposed to them just saying they dont want my services quite soon after going self-employed.

I'm minded to go self-employed and part-time, but only if they give me a contract for a certain amount of time in which they would use my services (probably 3-4 months minimum). If they just make me redundant I would only have 3 weeks notice plus 3.5 weeks statutory pay, which means being out of work before Xmas.

Has anybody got any tips on how to approach this ?!

As you are currently doing the office work as an employee, what difference would there be to suggest that you could actually be self-employed in that role.

If you simply move from employed to self-employed status without collecting any redundancy pay in the interim, you will have resigned on a mutually agreed basis but resignation nevertheless.

Even if you take on the office work on an employed (not self-employed basis), any future redundancy pay would be on the reduced pay under the revised part-time pay.

Personally, I would refuse to to move to self-employment - unless I felt sure that actually it was likely to continue into the new year and that I couldn't get other work at higher pay elsewhere plus, if push came to shove, it would be found that I was actually an employee still.

Regarding the self-employment status - it is not simply a matter of your invoicing them, there are other tests for self-employment which HMRC woud want to see satisfied. Who will provide the equipment for you to do your work? Will you be able to do the work in the way you want or the way you are told to do it? Will you have other clients?

getmore4less

Take the reduncay before they go bust.

Deal with what work they may have for you once you get the money

mungo_55

Thanks for the replies. Much appreciated !

We had a meeting with the boss on Friday and he agreed to keep me on the books as an employee and change me to 3 days a week part-time. Quite relieved about that outcome ! Self-employment looked very risky....