Redundancy Pay after Discharge

SteBrown

Hi,

I would be extremely grateful for some advice. I am currently bankrupt until the 10th of April 2014. I was in a redundancy situation and left my previous employer on the 28th of March 2014 and started a new job but I still have 4 weeks lieu of notice outstanding. I have not received any paperwork in relation to the exact amount although I know roughly. I have made the OR aware of this. What they do not yet know is that I will receive the payment after discharge and it will be received on or around the 28th of April 2014. I have spoken with the OR helpline and they advised I would get to keep some of the payment as it mostly assets and not income. However, after some further research on the web, it appears this is not the case. I would be grateful for any assistance or advice.

Many thanks in advance.

Kind regards,

Steven

debtinfo

Hi Steven, This amount should be classified as an after acquired asset in your bankruptcy. For the sake of clarity if the OR applies the law correctly then;

You will not receive any part of this money

and

The whole amount should be paid into the bankruptcy estate.

I have copied below the section of the Official Receivers Technical Manual that covers payment in lieu of notice and a link to the wider chapter covering redundancy (from 31.5.32 onwards) as you can see there is little room for interpretation or ambiguity.

31.5.35 Payment in lieu of notice

Payment in lieu of notice is compensation where an employer makes an employee redundant and fails to give a statutory period of notice. Payment in lieu of notice is paid irrespective of whether the employee obtains alternative employment immediately. An individual receiving payment in lieu of notice is also entitled to claim state benefits immediately. A payment in lieu of notice is, therefore, not “income” but property which vests in the trustee in bankruptcy. Payment in lieu of notice will either be an asset in the bankruptcy or can be claimed as an after acquired asset. To realise the asset the official receiver should follow the guidance in paragraphs 31.5.33. Where the payment in lieu of notice is made by the Redundancy Payments Service the amount paid is limited by statute and subject to mitigation. The amounts paid within the statutory limits will be reduced by any earnings or benefits received during the statutory notice period. Further details on the amounts paid by Redundancy Payments Services may be obtained here.

http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch25-36/Chapter31/part5/part2/part_2.htm

SteBrown

Many thanks for your help.

silvercar

Could you ask to be given gardening leave rather than pay in lieu of notice?

SteBrown

Many thanks.
I think it will have to be PILON because I've started a new job!!
The weird thing is the OR helpline said I would get to keep it all because I will receive it after my discharge date. Frustrating really.

silvercar

SteBrown wrote: »

Many thanks.
I think it will have to be PILON because I've started a new job!!
The weird thing is the OR helpline said I would get to keep it all because I will receive it after my discharge date. Frustrating really.

No legal reason why you can't overlap jobs.

SteBrown

As it stands. I still haven't received any final paperwork from my previous employer! So I don't even know what they will class as my last day of employment as or how much my final pay will be.