Compromise agreement help

RozzaW

Hi,
I'm new here, but have an urgent question.

My boss has told me that I need to have a change in pay structure that I don't agree with so I have asked for redundancy. She has come back and said that she won't do redundancy but we can look at a compromise agreement.

I was wondering what sort of meny I should be asking for?

I was thinking that I should be given my notice period, plus 1 week for every year I have worked? Would this be tax free?

Many thanks

Uncertain

RozzaW wrote: »

Hi,
I'm new here, but have an urgent question.

My boss has told me that I need to have a change in pay structure that I don't agree with so I have asked for redundancy. She has come back and said that she won't do redundancy but we can look at a compromise agreement.

I was wondering what sort of meny I should be asking for?

I was thinking that I should be given my notice period, plus 1 week for every year I have worked? Would this be tax free?

Many thanks

Normally the pay in lieu of notice would be taxable. Any additional payment that is not a contractual entitlement is normally tax free (up to 30K).

As to how much, how long or short is a piece of string! It depends on the strength of your case, the employer's attitude to risk and the value they put on their time.

The normal purpose of a CA is to settle a dispute (or potential dispute). You sign away just about every legal right you may have to claim against your employer in exchange for a sum of money. You get some money and the employer gets closure at a know cost.

You presumably feel you are entitled to redundancy but the employer doesn't agree? If you were redundant then there is a simple formula to work out your entitlement. If the employer were to pay you this but you were able to show that your job was not in fact redundant then you would still have a claim for unfair dismissal.

So, you could argue that you should get a bit more than the statutory redundancy figure as you would be giving up any further rights to claim.

However, they could argue that your job is still open at a new rate of pay leaving you with the option of taking it or resigning and claiming breach of contract.

Realistically you need to see what they are offering then take legal advice. For a CA to be valid you must be advised by a solicitor and it is normal for the employer to pay a certain amount towards this. Be aware that the amount offered will generally only pay for the minimum necessary to comply with the law. The employer won't pay for the solicitor to negotiate for you - you will have to meet that cost yourself but it may be money well spent.

SarEl

Uncertain wrote: »

Normally the pay in lieu of notice would be taxable. .

Not unless it is contractual it isn't.

But the easiest way around this to to not discuss notice periods or salary terms at all - simply a lump sum amount setlling all disputes and contractual obligations (such as notice pay). That way any amount up to £30k is a tax free allowance.

Emmzi

they will usually pay for you to see a lawyer to have the CA explained to you, and you need a sum to cover this. £250 is the lowest I would go, it can cost more.

you probably want an agreed reference in the agreement as well, and "good leaver2 status if there is a share scheme or similar.

you also need to think about loss of benefits - car? healthcare? employers contribution to pension? and so on

and how long you believe it will take you to find new employment. 3 - 6 months used to be the range, may be longer now.

any clawback of education fees etc waived.

you may negotiate some or none of the above. but they are things to think about.