Redundancy when company entering CVA 14 April 2017 at 6:36PM in Redundancy & redundancy planning 7 replies 4.8K views

Wysiwyg49

My partner's employer has issued redundancy letters (after consultation - everyone is going!) and is planning to enter a Company Voluntary Agreement (CVA) with an insolvency practitioner handling all the admin.

They say they will pay salary to end April (date of termination) and anything else will need to be claimed from the government claim service. We phoned the Insolvency Service helpline and were advised to send a letter requesting payment of all money due under the employment contract anyway, as "this will make the claim process much easier". Does anyone know why? When they have already said they're not going to pay. Should he send that letter before or after the termination date?

Another question I have seen elsewhere, but people had different opinions! If statutory notice would add another year of service, but he only got 2 weeks notice, will the statutory redundancy include that extra year or not?

Thanks for any help.

sangie595

The Redundancy Payments Service can't act until they have formal evidence that the employer won't pay. If they haven't yet entered into the CVA and you have only had your notice, then that isn't enough - in law your employer owes you the money. They won't pay until they have positive proof that the employer does not have the ability to pay - otherwise no employer would ever pay up if they knew someone else would foot the bill! Send the letter now asking when payment of redundancy will be made (plus holidays and anything else owed).

Notice must be at least statutory notice. And yes, if that would take him over another complete year then he would be due the extra years payment. If statutory notice isn't being paid, then this needs to also be in the letter - the employer cannot simply vary the notice period to suit themselves.

Wysiwyg49

Thanks very much. We weren't sure whether to send the letter when it was theoretically "overdue" i.e. after the final day of employment, or before.

Also I note on the government's guidance it says:

"You can claim statutory redundancy pay if you’re made redundant and if:

- you’ve been continuously employed for 2 or more years
- you apply in writing to your employer or an employment tribunal within 6 months of your job ending "

So I guess this letter is to satisfy that requirement, of applying in writing to the employer. We should probably tell the other employees, as they are being told the claim will be available to them when their employment ends. It does seem like a massive "get-out" on the part of the employer TBH.

sangie595

Wysiwyg49 wrote: »

Thanks very much. We weren't sure whether to send the letter when it was theoretically "overdue" i.e. after the final day of employment, or before.

Also I note on the government's guidance it says:

"You can claim statutory redundancy pay if you’re made redundant and if:

- you’ve been continuously employed for 2 or more years
- you apply in writing to your employer or an employment tribunal within 6 months of your job ending "

So I guess this letter is to satisfy that requirement, of applying in writing to the employer. We should probably tell the other employees, as they are being told the claim will be available to them when their employment ends. It does seem like a massive "get-out" on the part of the employer TBH.

I agree - it's a p***take that employers can legally have the money to operate but not to pay the people who work for them. But it's legal, so there we go.

When you write isn't as critical as being the written confirmation that he won't be paying. Make sure you include anything that you are owed - notice pay, holidays, expenses, etc as well as redundancy pay.

Wysiwyg49

Another question sorry. In the statement of what the employer theoretically owes the employee, is the redundancy pay just the same as the statutory amount, i.e. capped at the current rate per week? Or would you normally expect to get X weeks at your proper salary rate?

(It is a technical point as they're unlikely to pay it anyway! But just want to get the letter right.)

sangie595

That depends on what your employers policy on redundancy is. If they don't have one, then it's statutory.

Wysiwyg49

Thanks, that's what I thought (the employment contract is silent on the issue as you would expect!)

Many thanks for your quick replies. You must work with this stuff - don't envy you! What a minefield.

sangie595

Wysiwyg49 wrote: »

Thanks, that's what I thought (the employment contract is silent on the issue as you would expect!)

Many thanks for your quick replies. You must work with this stuff - don't envy you! What a minefield.

Sort of yes. I work for a union. And yes. There are so many variables and so much law, that sometimes it's hard to keep it accurate.