At what date to calculate number of years

TrickyDicky

Hi All

We have a threat of redundancy at work. I am on a contract with 3 months notice (each way) and a "pay in lieu of notice" (PILON) clause.

We have been told they will be offering the following terms:
1. 2.5 weeks pay for each full year (no pro rata'd pay)
2. Contracts will be terminated on 31st December.

I started work on 2nd March. 3 months notice would take me over this date. But the response back from HR has been that as contracts will be terminated on 31st December, this date will be used when calculating years service.

So the questions :
should they be using the end of my notice period for the date, or can they use the 31st?
Can they use the 31st because I have a PILON clause?
Can they do this because the redundancy terms are greater than statutary?

I am asking because in a previous job where I was made redundant, I had no PILON clause. Becuase of this, the notice took me over my anniversary and they had to pay be the extra year AND pay my notice period as damages.

sangie595

The correct termination date is the date of termination plus statutory notice, not contractual notice. That gives you the effective date of termination for the purposes of calculating redundancy pay. This is true whether or not the contract has a PILON clause. Whether that happened in the previous cause I don't know - but if it didn't then you were overpaid.

http://www.personneltoday.com/hr/calculate-pilon-redundancy-pay-when-making-a-payment-in-lieu-of-notice/

getmore4less

It is date of notice + statutory notice(not date of termination) if that is later than date of termination.

This can be significant as some companies give early notice but still pay a full PILON payment at termination.

getmore4less

The second issue is exactly how the enhanced payment is worded because they can use any date/service they want as long as the end result is more than statutory.

sangie595

getmore4less wrote: »

It is date of notice + statutory notice(not date of termination) if that is later than date of termination.

This can be significant as some companies give early notice but still pay a full PILON payment at termination.

No it is not. As the link I provided very clearly states:
"So where an employee is dismissed without notice (but receives a payment in lieu of notice), the employer should add on the minimum statutory notice period to the employee’s service as at the date on which the employment ends." A date on which notice is given cannot be later than the last day of work - notice cannot be given retrospectively. And the date of termination is the last day of employment. The ETD in law would therefore be 31st December plus statutory notice.

The end date of employment is the critical date for redundancy calculations, not the date of notice. And if there is PILON, there is no notice! That is why it is pay in lieu of notice!

getmore4less

That is not what the legislation says and refers to no notice situations.
Notice can be given in advance of termination even when a payment equivalent to full PILON is given(companies still call it PILON).

Article also fails to cover another common scenario partial PILONs.

sangie595

Sorry but I disagree with your interpretation, and the one I have given is the one used by everyone I know - lawyers and tribunals alike. By your method, if I tell someone that they will be redundant in March 2017, and paid PILON, the termination date for calculating redundancy pay is today ( notice given) plus statutory notice ( say six weeks for six years service). Making their termination date whilst they are still working. That is patently idiotic. Sorry, you are wrong.

getmore4less

sangie595 wrote: »

Sorry but I disagree with your interpretation, and the one I have given is the one used by everyone I know - lawyers and tribunals alike. By your method, if I tell someone that they will be redundant in March 2017, and paid PILON, the termination date for calculating redundancy pay is today ( notice given) plus statutory notice ( say six weeks for six years service). Making their termination date whilst they are still working. That is patently idiotic. Sorry, you are wrong.

The key part of the legislation is if notice date + statutory notice is later than the termination date.

The date for service for redundancy is the later date.

getmore4less

http://www.legislation.gov.uk/ukpga/1996/18/section/145

sangie595

Sorry, but I do not agree with your interpretation of the wording and your definition of "notice" as set down in law. We will have to agree to disagree - the interpretation I have set down here is widely used as the correct interpretation, as supported by the link I provided.

sann420

Sorry I am barging into some one elses thread as I have exactly the same issue.

My start date at company is 3rd of Jan. My end date at company is 31st of Dec(45 day notice period ... statutory?).

However my contractual notice period is 3 months which gets me to March and they are paying me for this in leiu. So if I go over the 3rd of Jan date which I am missing by like 2 working days then I get one whole year of extra severance.

Do I have a claim here?