Pay in lieu of notice shortfall

kasper90

I have been made redundant as the company I worked for has gone in to receivership.I am due 12 weeks pilon.I have worked for three weeks and received jobseekers allowance when I was not working.The pilon will be reduced by the amount that I have earned and claimed.Can I,therefore,claim the amount deducted by the government from the administrators of the company as a preferential creditor?

System

I am afraid not

Richard Long, Insolvency Practitioner

Non-preferential creditor

Any creditor who is owed money by a company or individual which is not protected by security. Employees are non-preferential creditors for arrears of wages exceeding £800, redundancy pay and pay in lieu of notice.

kasper90

Thank you.I will still try though.;)

kasper90

What I do not understand is this.If the company that made me redundant was still trading,I would have received my full 12 weeks pilon.If during that period I worked then I would have my wages from the new job and my full pilon amount from the company.Therefore it is my view that the company owes me the money that the Government has stopped from my pilon amount.

zzzLazyDaisy

kasper90 wrote: »

What I do not understand is this.If the company that made me redundant was still trading,I would have received my full 12 weeks pilon.If during that period I worked then I would have my wages from the new job and my full pilon amount from the company.Therefore it is my view that the company owes me the money that the Government has stopped from my pilon amount.

You are right in that IF the company had paid you, they would have given you the full amount of your PILON. You would also not have been able to claim JSA during the period covered by the payment.

BUT, if the company had failed to make the payment and you had to take them to an employment or court for breach of contract, you would not have been awarded the full amount. This is because you have a duty to mitigate your loss, so any income earned during the period covered by the PILON would be deducted from the amount of compensation.

The reason for this is the rule that you 'can't profit from your loss'. In other words, if the company had insisted that you worked your notice, you would not have been available to work for another company, and you could not have claimed JSA.

The government compensation scheme works in exactly the same way. Taxpayers money is being used to ensure that you do not lose out by the fact that you were not able to work, and be paid, for your notice period. Any overlap with other income or benefits must be taken into account.

I hope this explains how the system works, even if it is not what you want to hear.