Redundancy possibly cancelled - would I still get bonus? 13 March 2020 at 9:28AM in Redundancy & redundancy planning 3 replies 222 views

jackstini

Was placed on consultancy in October, redundancy confirmed in writing 7 November.  3 months' notice so leaving date would be 7 Feb but the company asked me to stay for a further 12 weeks to help transition the business to the new model, so leave 1 May
On top of the redundancy, they confirmed an extra weekly amount as an incentive to stay for those 12 weeks and a lump sum bonus tied to objectives to do with the transition, both to be paid with my final month's pay
We now have a new CEO who is very likely going to change the decision to move to the new model and keep the old one, so very likely my redundancy will be stopped and I will be asked to stay
Understand I would not get redundancy payment in this case, but should I still get the extra payments and the bonus (I have achieved the objectives, although will now have to work to undo them all!)
Also out of 8 people they made redundant, 6 have already left.  My role would therefore be slightly different so should I be renegotiating terms based on that?
I have a call tonight with the CEO and just want to get my head straight first regarding my options!

jackstini

Update - new CEO now gone and we have Insolvency practioners in
If they put the company into administration/receivership what happens to my redundancy & bonus?

Reggie01

You'll get £538 (capped) per week from insolvency service for redundancy pay, accrued but not taken holidays and any outstanding weeks pay. If more than 20 people employed at same location you can also claim protective award at Employment Tribunal. You'll then get 8 weeks at £538 per week, less any outstanding weeks already paid by insolvency service.

If you were earning over £538 per week that will go as a secured creditor against administration.

As for the bonus that will probably be an unsecured creditor claim, which means you may get some of it, if there is anything left after secured creditor payments are paid out. 

Undervalued

Reggie01 said:

You'll get £538 (capped) per week from insolvency service for redundancy pay, accrued but not taken holidays and any outstanding weeks pay. If more than 20 people employed at same location you can also claim protective award at Employment Tribunal. You'll then get 8 weeks at £538 per week, less any outstanding weeks already paid by insolvency service.

If you were earning over £538 per week that will go as a secured creditor against administration.

As for the bonus that will probably be an unsecured creditor claim, which means you may get some of it, if there is anything left after secured creditor payments are paid out. 

That is assuming the bonus is a hard and fast contractual entitlement. The majority are not and have that favourite word "discretionary" in their terms and conditions. Although under certain limited circumstances an employer's "discretion" not to pay a bonus can be challenged, the discretion is normally fairly wide. With administrators involved they will look very closely at whether there is any lawful way out of it as other creditors may have a stronger claim on any remaining assets.