Redundancy after a Paycut

carnassials

I have just been made redundant today. I will be given four weeks gardening leave and three weeks pay for my three years service. Plus three days of holiday.

However, they last month the company imposed a 10% pay cut on me which was to be reviewed in December this year.

Will they calculate my redundancy payment on the basis of my reduced pay? For the majority of my time there I was on a higher wage.

Thank you all.

Andy_L

If it is statuatory redundancy it will be based on the lower pay. If it is a beeter than statuatory package then it is whatever the contract says

carnassials

Does it not make a difference that I have been on the lower pay for only four weeks? It seems very underhanded to me that a company can do this.

Edit: especially as the company assured us it was either paycuts or redundancies, and they have gone ahead with the redundancy anyway. I wouldn't have accepted the pay cut if I knew I was to be made redundant one month down the line.

annie1975_2

I may be wrong here (and someone may come along and correct me if I am), but is it not based on the 12 weeks wage before the 3 months notice given?

marybelle01

I'm not an expert but I am not sure that it is that clear cut as either of the answers given - so I am holding up my hands to not giving an answer I am certain of. But I think that if the pay cut is temporary and subject to review, then there is a legal argument that it is a temporary variation of the contract and so the higher level of pay is used. Otherwise every employer would cut pay four weeks before making people redundant!

If you can't get a definitive answer here, go to http://www.redundancyforum.co.uk/ - there's a lawyer there who should be able to give you an accurate answer.

Andy_L

annie1975 wrote: »

I may be wrong here (and someone may come along and correct me if I am), but is it not based on the 12 weeks wage before the 3 months notice given?

My understanding is that the 12 week average was only if you work irregular hours, if you were on a fixed hours then its the contractual salary the day you are made redundant.

carnassials

Thanks _ I have posted it in the other forum.

I was waiting to get the paperwork through and they have calculated it on the reduced pay.

I would like to add that I accepted the pay cut on good faith that there would be no redundancies. Also the document said that was my salary was £20,000 reduced to £18,000 and was to be reviewed in December.

getmore4less

If the reduction was agreed on not being made redundant(you have this is writing?) then there may be a claim for the extra redundancy on a breach of contract.

for £115.38 it would not be worth them defending a claim.

carnassials

We received nothing in writing - just a new contract to sign saying that my salary is £20,000 but reduced to £18,000 - to be reviewed in December. I was verbally advised about how the pay cuts were to avoid redundancy.

I was going to write them a letter:-


Dear Sirs,

Thank you for your letter of 1 August 2012.

I have seen that the company are calculating my redundancy payments on my lowered wage. I will have to submit a grievance on this basis as it is not a fair decision.

The company has misled me into making a contractual change to reduce employee pay in order to avoid a redundancy situation in the staff, and has now within a month made my position redundant. The company has then used this change as a basis for a reduction in my entitlement to redundancy pay.

I am owed based on my normal wage:-

Notice Pay: ...
Redundancy Pay: ....
Holiday Pay: ....



I have been given this advice by ACAS. If there is a refusal to what I have outlined above then I will have to consider using an ACAS mediation service or the Employment Tribunal.

Could I have a reply please within five days.

Yours sincerely,

They have offered me a figure about £300 less than it should be. It is a small company so I am worried they will take this personally, although they haven't given me the same consideration.

getmore4less

how do they get 300?

3years service on £18k is £1038.46 on £20k is £1153.85

unless some of the full years are over 41.

carnassials

As an update for everyone, I approached them via e-mail and they sent me a cheque for the difference (£244) a week later. Maybe they recognised that it was an unfair situation.

Thanks for the advice!