Employee status and redundancy 20 March at 6:49PM in Redundancy & Redundancy Planning 2 replies 91 views

Kitten07

Hello. My husband works for a small company of 4 employees under 2 brothers who own the business. It's a shop and may soon go under with the reduction in already limited custom, owing to Covid 19. He has worked for them for over 10 years and as far as I know has never been given a paper employment contract  although in many ways he seems to satisfy the conditions for employee (rather than 'worker') status. He works times set by them, pays tax and NI, receives full wages for 4.5 weeks of paid holiday, and in the last five years has worked as a key-holding manager in charge of staff and stock-ordering etc, having been promoted from the role of assistant which he began as.  If he is an employee the government website states he'll be entitled to redundancy pay or if the business becomes insolvent, statutory redundancy pay. However I wonder whether the lack of any piece of paper offering him employment or setting out it's terms negates all this in terms of any redundancy pay entitlement? An additional question is whether there is any entitlement to claim benefits whilst waiting for redundancy pay to come through? I hope someone has the answers on this one! Many thanks. 

thebrexitunicorn

Hi Kitten07.   Not having a written contract doesn’t remove the right to a redundancy payment. If your husband’s employment ends he also has the right to statutory notice (1 week per completed year of service to a maximum of 12 weeks) or pay in lieu of notice. If he’s worked for the employer for between 10 and 11 years that’s 10 weeks notice. 

Undervalued

thebrexitunicorn said:

Hi Kitten07.   Not having a written contract doesn’t remove the right to a redundancy payment. If your husband’s employment ends he also has the right to statutory notice (1 week per completed year of service to a maximum of 12 weeks) or pay in lieu of notice. If he’s worked for the employer for between 10 and 11 years that’s 10 weeks notice. 

Indeed.

Based on what Kitten07 says, there should be no problem proving that he was an employee. If the business does fold then he would be able to claim his redundancy money from the government although this isn't always a quick process. Notice pay would be taxable just as if he was working but the redundancy money would be tax free up to £30K.