Redundancy without severance

Davina_Hart

I am working for a company that has served me a notice of termination stating that they are making me redundant as the company has experienced a financial decline and making a loss. As per the terms of my employment, there is a three months’ notice which was served in July to terminate the employment in October.

I was going through the terms of employment to see if there is any severance. I have noticed a section for payment in lieu of notice. I have attached this part and some associated parts of my employment contract for reference.

I am working for this company from the past 2 years. It’s a small company and HR is almost non-existent. All decisions are made by CEO including offer letter, termination letter, holiday & sickness approval etc. I have been informed more staff will be made redundant, but as it stands, I am the only one leaving for the reason mentioned above. In fact they have recently hired a senior member of staff.

The company hasn’t mentioned anything about termination package or severance pay.  

My question is, am I correct in my understanding that under clause 18.1, the company will make a payment in lieu of notice?

DullGreyGuy

Davina_Hart said:

I am working for a company that has served me a notice of termination stating that they are making me redundant as the company has experienced a financial decline and making a loss. As per the terms of my employment, there is a three months’ notice which was served in July to terminate the employment in October.

I was going through the terms of employment to see if there is any severance. I have noticed a section for payment in lieu of notice. I have attached this part and some associated parts of my employment contract for reference.

I am working for this company from the past 2 years. It’s a small company and HR is almost non-existent. All decisions are made by CEO including offer letter, termination letter, holiday & sickness approval etc. I have been informed more staff will be made redundant, but as it stands, I am the only one leaving for the reason mentioned above. In fact they have recently hired a senior member of staff.

The company hasn’t mentioned anything about termination package or severance pay.  

My question is, am I correct in my understanding that under clause 18.1, the company will make a payment in lieu of notice?

How long exactly have you worked there when your notice was served? The world changes a lot depending on which side of 2 years you've been there. 

As the clause says, they have the option of paying in lieu of notice but it's their choice as to if they do this or make you work the notice. As you are already 2/3rds the way through your notice it does seem that they aren't going for PILON

beckstar1975

That would only be if they weren't going to get you to work your notice. You have been since July so PILON is not likely to be given for the last month

Andy_L

They will have to pay you statutory redundancy - assuming, as DullGreyGuy asks, you've been there for more than 2 years

Davina_Hart

Thanks guys, I've been employed with this company since 17th July 2021, with employment ending on 13th October 2023, it is over two years of employment 

DE_612183

It also depends on how old you are.....

Making staff redundant: Redundancy pay - GOV.UK (www.gov.uk)

Davina_Hart

I am under 40, so following the government website link, I am likely to get a week pay for every year served. This would be 2 weeks pay for 2 year service. 

Is this something employer has to initiate by default or do I need to bring this to their attention? As I said in my original post, HR element is literally non-existent in this company. 

housebuyer143

Davina_Hart said:

Thanks guys, I've been employed with this company since 17th July 2021, with employment ending on 13th October 2023, it is over two years of employment 

They announced the redundancy before the 2yr mark. Would that make a difference in that you are not entitled to redundancy pay?

Davina_Hart

housebuyer143 said:

Davina_Hart said:

Thanks guys, I've been employed with this company since 17th July 2021, with employment ending on 13th October 2023, it is over two years of employment 

They announced the redundancy before the 2yr mark. Would that make a difference in that you are not entitled to redundancy pay?

Oh, I didn't think about this.The notice period has stretched the redundancy period over 2 years. In fact notice of termination was served on Friday, 14th July 2023. 

DE_612183

Looking at the legislation it talks about the payment being made when the employee leaves, and if they have had 2 years continuous service - so I read that as yes they should pay it.

It may be the CEO thinks that by giving notice before the end of the 2 years they have got away with it - but I would remind them of their obligations.

Andy_L

Davina_Hart said:

I am under 40, so following the government website link, I am likely to get a week pay for every year served. This would be 2 weeks pay for 2 year service. 

Is this something employer has to initiate by default or do I need to bring this to their attention? As I said in my original post, HR element is literally non-existent in this company. 

Considering that the wording of that contact suggests they have little grasp of UK employment law you should probably "remind" them of it.