PILON and pension benefits

madeinireland_2

I am entitled to 6 months PILON if I am somehow forced out on poor performance from my job.

If that were to happen would it in effect be the same as if I continued to work for the company for a further 6 months - so would I have a further 6 months of pension benefits ? Or could I insist on just being paid for a further 6 months and refuse a single one off payment ?

Mr confused ...

Thanks...

d3liberate

In my case, and i'm sure this applies in most cases, PILON does not include any additional benefits such as pension, private medical, its your basic salary payment you receive, which is subject to income tax and national insurance.

If your contract has 6 months PILON, that is pretty high.

Its not the same as if you work for them for 6 months, you lose your benefits, your company email address, mobile phone and everything else that comes with being employed. Trust me, it seems wonderful now, you get to sit on your behind for 6 months while getting paid, but it really isn't all that rosy. If you can find another job during your PILON period, then you have done well.

If you have been employed continually for a long period of time, then it really sucks not having a job. You start to go a little crazy and would ask them to go back to work for free.

If you have the option to stay, agree it with your employer that you will work through your notice period of 6 months, in return for a settlement agreement at the end, which is tax free. You can then spend 6 months in a slightly casual mode at work, where you can look for alternative employment, enjoy all the freebies you get being employed and then leave on good terms without being 'dismissed' and have the shame of walking out of the office.

The single one of payment will be tax free upto £30k, PILON payments won't be!

Its in everyone's interest, they get 6 months 'work' out of you and you get 6 months more pension contributions and other benefits.

Notnewnotold

Same situation I'm in right now, and the clearly stated position of my HR is that no benefits will accrue/be paid in a PILON situation, as your employment is terminated at that point. I'm definitely considering the worked notice option given that it's a very substantial monthly benefits package I'd miss out on.

There's also potentially the situation that a long notice period like this could push you into another full years completed service and increase your redundancy settlement amount...

madeinireland_2

Guys I've checked my contract and in fact it does not mention PILON. It does say that I am entitled to 6 months notice.

Does that mean I can insist on working the 6 months and accure the pension benefits. Those benefits are worth a lot in my case so I'm keen to insist on it if the need arises.

Thanks.

d3liberate

For a summary dismissal, they can terminate you without notice and there must be a provision within your contract where this is mentioned with PILON. 6 months notice is a very long period of time for a company to give. You really need to take legal advice where someone can fully read your contract.

If you are put on gardening leave for your notice period, then you are still employed and you will get your salary and your benefits. If its PILON, then you are effectively dismissed and you get your basic salary without benefits.

If the dismissal was unfair, and you go to a tribunal, you can attribute these as part of your schedule of losses, your pension payments, and private medical and other benefits.

remorseless

Can you work during the PILON notice time?

madeinireland_2

Thanks - I'm not talking about a serious misconduct dismissal or anything like that - more along the lines that they don't think your performance is up to scratch. As a result of this can you insist on working your notice even if on gardening leave ?

marlot

When I was made redundant, allowing me to go on gardening leave would have increased my payout. My solicitor advised that the termination date was whatever the company deemed it to be, and I had no ability to change it.

madeinireland_2

I don't understand this - surely if you are entitled to 6 months notice they would have to put you in the position as if you had worked for them for another 6 months including benefits like pension. My thinking is that it would be up to them to decide if you came into work in that period or you spent it on gardening leave.

d3liberate

madeinireland wrote: »

Thanks - I'm not talking about a serious misconduct dismissal or anything like that - more along the lines that they don't think your performance is up to scratch. As a result of this can you insist on working your notice even if on gardening leave ?

You can't insist on anything. You are an employee of the company. It all depends on what is in your contract.

For me personally, my contract had a clause where they could terminate my employment with immediate effect if they pay me two months PILON and I 'disobey an order of management. They chose to exercise that option without any substance behind it, and no formal (or even informal) disciplinary action taken prior to the immediate termination.

If they want to get rid of you, they will and they will calculate their exposure and make a decision on how they will get rid of you based on those circumstances, together with what is in your contract.

What you can do is negotiate your exit out of the business, if you feel you have a case. So if your performance is on par with what it should be, and you see no reason for them to dismiss you on performance grounds, then you have a better negotiating position. Reading between the lines, it seems there is cause for them questioning your performance, which swings the ball more into their court.

Have you had any formal disciplinary action against you for performance? If yes, then you can reasonably expect to be called in soon and terminated without notice and get PILON in accordance with your contract (which is taxable, and excludes any benefits you get as an employee). They may also offer you an ex-gracia payment to stop you taking them to court for unfair dismissal which is tax free upto £30,000.

Depending on what they offer you, will give you a clearer indication of your negotiating position. For me, my benefits were a 5% pension, plus private medical plus a few others. Over the course of 12 months, this equates to around £5000 so not a deal breaker for me to keep those. I'd rather have the money personally.

It would cost them quite a bit to PILON for 6 months, with company NI contributions (if they apply) so if it were me, I would just negotiate payment upto termination date, plus unused accrued holidays, and say you will sacrifice the PILON in exchange for a ex-gracia payment which is tax free upto £30k (assuming they will offer you less than £30k to leave quietly).

Redundancy and Performance are two different things entirely. The only similarity is both put you out of a job, so I think if you are dismissed on performance grounds, they are less likely to offer you gardening leave, or very unlikely actually.

madeinireland_2

I don't have any formal performance action against me at all - but as I have had a period of sickness on stress I think they are likely to try an dream up some issues to help them along. Theses would only be minor like not achieving impossible objectives etc.

You say it depends on my contract - well it states there that I am entitled to 6 months notice so I assume then I can have that ?

The reason I ask is that I would be happy with that so I could then stop worrying and not be too concerned if they did start to play silly and invest performance issues which are very likely to be subjective.

Thanks.