Entire department moved to Eastern Europe - fair redundancy offer?

edited 14 October 2018 at 4:55PM in Redundancy & redundancy planning
5 replies 1.7K views
RedundantBadgerRedundantBadger Forumite
2 Posts
edited 14 October 2018 at 4:55PM in Redundancy & redundancy planning

My company has decided to close down my entire department, and set up a new one from scratch in Eastern Europe. This will make me and everyone else in my department redundant when the transition period has been completed in June 2020 (which admittedly is a very fair notice period!).

While this transition will be gradual, and our department will thus shrink in size during the course of the next 20 months, I've been informed that the company would like to keep me on in my current role until the very end of the transition period.

This is the compensation offer that they are giving me:
- A choice between a statutory redundancy payment or a settlement agreement for an enhanced redundancy payment at the agreed termination date of June 2020;
* Statutory Redundancy Payment would be 1 week's pay for each year worked.
* Enhanced Redundancy Payment would amount to 4x the Statutory Redundancy Payment (all tax free)
- Additionally, they are offering me a retention bonus with a total worth of 20% of my annual salary, paid out in 4 installments between now and the agreed termination date, as an incentive for me to stay on during the transition period.

My questions:
- Would there be any reason for me to take the Statutory Redundancy Payment over the enhanced offer? Am I signing away any employee rights by agreeing to the settlement?
- Would you all say that this is a fair offer? Is there anything else that I should be entitled to, or could reasonably ask for?

Many thanks for any feedback, it'd be greatly appreciated!


  • tacpot12tacpot12 Forumite
    6.6K Posts
    Sixth Anniversary 1,000 Posts Name Dropper
    If you accept the enhanced payment, you would be agreeing to the redundancy process, which may not be particularly fair to those who are to be let go before the department closes for good. It is possible that you could accept the enhanced payment and suddenly find that you are let go more quickly than expected, and have no way to challenge this because you accepted the enhanced terms.

    If you accept the enhanced payment, you would also not be able to claim unfair dismissal.

    In my experience, the terms you are being offered are fair, and even if things don't work out as well as you expect, you would be better off taking the enhanced offering. With luck there will be delays getting the new department up to speed and your will end up with slightly more length of service than you expect.
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • getmore4lessgetmore4less Forumite
    46.4K Posts
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    How long have you worked there?

    Make sure.
    No statutory cap on the weeks pay so 4x full pay if over the cap.
    The package still applies if they terminate early.

    I would ask for full statutory PILON added to the exit deal, optionally with extended notice period since they are asking you to stay.

    Up to you if you want an exit clause so you can terminate early with notice.

    If they need you to stay to transition/train get the working conditions, travel, TOIL and expenses understood before agreeing.

    The upside is potentially good experience in an offshoring process with good contacts for networking.
  • SMCGSMCG Forumite
    87 Posts
    Hi. Sorry to hear about your jobs and whilst I can't offer advice, I hope you get everything you are entitled to and a new job comes along at the right time.
  • Ok I've been trying to get quotes working on my mobile without luck, so here goes the old-fashioned way:

    Thanks for your insights!

    At the agreed termination date, I will have worked there for 6.5 years. I did not specify this in my original post, but I do have it in writing that my redundancy payment amount is based on my length of service at the termination date (so 6.5 years). If I am let go sooner than currently expected, the redundancy payment will not decrease, but if things are delayed, the redundancy payment will increase accordingly. Likewise, if my salary increases during this period then the payment will be recalculated based on my new salary. Is this what you mean with full PILON? (sorry, while I am good at my job, I am far from an expert when it comes to legal stuff!)

    It is my understanding that I already have the right to leave early with my regular notice period (which would obviously mean that I would not receive the redundancy payment). Will double check though just to be sure.

    The thing that worries me most is that the documents specify that the company has the right to amend or cancel the agreement at any point. Which would mean that I'd be legally powerless if they do decide to make things difficult 20 months from now.

    Also I'm wondering whether the specified added responsibilities of helping to set up the new department and keeping the morale of my team up during these difficult times don't warrant an increase in my basic pay. But I expect they'd argue that this is already covered by the retention bonus and redundancy payment.

    @SMCG: Thanks for your kind words, much appreciated!
  • getmore4lessgetmore4less Forumite
    46.4K Posts
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    I would want the agreement to say minimum amount if terminated(for any reason) at any time upto an agreed final date.
    then list any conditions that make it more like longer service increases in pay etc.

    The idea of also asking for PILON for full notice means if they decide to terminate early they have to pay for the equivalent of a new notice period on top you could have it just be agreed there needs to be a contractual notice to terminate early(PILON,Garden leave,worked) what you don't want is them using the date of the agreement as the notice date and say you finish to day without any extra pay.

    The thing is they don't have to offer anything they can just phase the redundancies and you go when they are ready, the compromise is more of a bribe to keep you happy while the transition happens and help make it happen.

    One of the potential risks is they change their mind and they bring the jobs back and you never get to leave with any package.
    That may be something you could be happy with.

    Have they done a trial or done this for another group.
    Do they already have an organization in place, these sort of things need management local that can be trusted(usually one of your own at the start).

    I would also get some clarification of the plan as you could end up on site for extended periods, not everyone can do that but some would love it.
This discussion has been closed.
Latest MSE News and Guides

The 'Ask An Expert' event

Last week's energy Q&A with MSE experts

MSE Forum

Ninja Kitchen air fryer & grill £175

Normally £250. Excl Northern Ireland

MSE Deals