Delaying redundancy payment linked to new contract.

sghughes42

This is complicated ... but basically, I'm likely to be made redundant on Friday. My employer has offered me a new contract which will come in after I've worked my notice which will be for one day a week for a period of 4 months. Not ideal but at least it guarantees something at a time when new jobs are going to be hard to come by.

Two things I'm concerned about, first they seem to want to link my redundancy payment to this contract - so I won't get the payment until the new contract is up. It will be the full payment based on my existing job, just delayed by 4 months. Second, they won't show me the new contract in advance and want me to go in on the day, have it explained and sign there and then. I can apparently go to another room to 'think about it'.

Several warning signs are flashing here.

Why tie the redundancy pay in with a new contract?

Why expect me to sign on the day for a contract that doesn't start for 7 weeks?

Why not let me see the contract in advance?

Does anyone have any thoughts or suggestions on things to ask? In no particular order things I've thought of include:

Is the redundancy pay guaranteed if the contract is ended early.

Can it be ended early, for example if I get a job offer elsewhere.

If they need me to work one day a week why not just extend furlough and pay me the 20% uplift to allow that?

Sorry for the long post, the redundancy was expected, this wasn't and I'm not sure how to approach it. My gut feeling is to refuse to sign without the chance to go away and think about it. Beyond that - who knows? I certainly don't want it to jeopardise my chances of getting a full time job. I'm more than happy to help my current employer, the redundancy isn't their fault, business has just vanised and they see no sign of it returning this side of Christmas.

sharpe106

For one day a week you may be better of claiming benefits depending on your pay and circumstances. The rest just sounds dodgy to me.

Jeremy535897

If the redundancy payment is under the statutory rules, and you move from full time to part time with no break, see this:
https://www.xperthr.co.uk/faq/where-an-employee-has-recently-changed-from-full-time-to-part-time-hours-how-should-their-redundancy-payment-be-calculated/60812/
Just how copper bottomed is the statement that your redundancy will be based on the old rate? If they become insolvent in the meantime, such a statement would probably be worthless anyway.

Say you cannot afford to accept their revised contract without the redundancy payment being made at the end of your full time working, as it will involve a very significant reduction in pay. If the redundancy amount is too small to make this point credible, it probably doesn't matter anyway.

sghughes42

My understanding is my full-time contract will finish (I'll be working my notice) then the new one will start so does that still apply? It's not clear from the article, it *seems* to read that an existing contract is being varied. While I've not seen the contract yet, my understanding is it will be a new and separate contract from the one I'm on currently - I will get that confirmed though.

The payment will be 9 weeks at the capped rate so not an insignificant amount. As for how sure? Who knows. The company is 10 years old, spun out of one that is getting on for 50. The parent company has a bank balance in 8 figures but whether they'd use that to keep this one afloat I don't know - they've chosen to cut a third of the staff rather and cut the side of the business I work on completely rather than use some of that money to ensure they are in a good position to recover so....

My gut feeling is to ask for at least 50% at the end of the my notice period but that is assuming I sign this new contract at all.

I can't claim any benefits - my wife works and I sell part-time on eBay which, while it's a tiny income compared to my salary, would reduce any job seekers to zero.

Jeremy535897

I am not an employment lawyer, but redundancy is calculated on the length of employment. You cannot get round that by rehiring someone on a new contract because of the concept of "continuity of employment". So in answer to your question, if you have continuity of employment there is a real likelihood that future redundancy will be based on the shorter hours, and if you don't have continuity of employment, the clock resets and you have no statutory entitlement at all for two years. Of course your contract of employment may provide additional rights, although if the employer becomes insolvent those rights may not have any value.

sghughes42

This all sounds very complicated and certainly not something to be signed up to on Friday I don't think. Where would be a good place to look to for advice and how much is that likely to cost? As the 4 month contract is only likely to result in £2k of income if said advice is going to be expensive then it may well be that declining the contract is the easiest option.

Continuity of employment might explain why they have chosen 4 months though - five would add an extra year to my length of service.

I understand that if it counts as a new contract I'd have no rights, I'm going to get made redundant anyway so that's fairly academic. The concern is making sure I don't lose what I should be entitled to. If this new contract risks that (or it would prevent me taking up another job) then I see no reason to accept it.

sharpe106

I think it could be more hassle then it is worth, tell them you are happy to finish completely, all pay etc then you will happily work 1 day a week until you find a new job. 

Jeremy535897

I suggest that you say what I suggested in my earlier post, that you cannot afford to wait 4 months for your redundancy payment if you are only going to be working a day a week.

prowla

Take the redundancy and tell them you'll be available to back in a week's time.

sghughes42

What is really strange about all this is where the 1 day came from. I'd suggested temporarily reducing my hours as a way to avoid redundancy, I'd indicated I was thinking no less than half and for a defined period. Apparently 'someone else' at risk had offered to go down to one day and he manager assumed I'd accept that as well. I've only ever said I'd have to look at the details when this was suggested but he seems to be treating it as a fait accompli that I will sign this 1 day a week contract on Friday...