HR redundancy figures are wildly different from mine.

ChasingtheWelshdream

Hi,

I have asked HR for a breakdown of their calculations but in the meantime, am wondering if I am missing something fundamental. 

I have 16 years service and our policy states 1.5 weeks pay per year. I earn circa £460 per week gross. I have calculated this by multiplying my monthly gross x 12 and then dividing by 52.

By my reckoning, 16x1.5 =24 weeks pay. Multiplied by £460 = £11,040.

HR have provided me with a figure of approx £4.5k. I can’t figure this out at all. 

I have even put my salary into the .gov website and it calculates around £8.5k statutory

Am I missing something fundamental such as “weekly pay” is actually an average over the years, and minus tax/insurance/pension contributions - not my actual pay? Or something similar?

I won’t get a reply from HR until Tuesday so am wracking my brains in the meantime. Am I correct, or is HR?

kimwp

Are there any caps? When redundancy offers happen at my company, they are capped at 12 weeks of pay and a weekly value. (I think it's that statutory min).

El_Torro

If you have (or at least have read) the policy then if it doesn't mention caps then hopefully there aren't any.

They shouldn't be taking any tax off the redundancy payment since the first £30k of a redundancy payment is tax free.

Unfortunately any comments we make are just guesswork until you get clarification from HR. 

ChasingtheWelshdream

Thanks both. I have the policy and it says settlements  are capped at 30 weeks with no cap on weekly pay. 

Originally HR gave me that £4,5k figure, which I queried and asked for confirmation that my whole service had been used (I should have continuous service due to a transfer). They confirmed the 16 years service and that the figure is correct. I am now awaiting a breakdown to see how they reached that figure and have provided my own rationale. That is as far as I have got so far.

I know the first £30k is tax-free, but am unsure if I am correct to use my gross salary into my calculations? And whether it is somehow an average, as I was previously on a much lower salary for a few years (I am only part-time hence the lowish figures). 

My union have a dim view of the company in terms of how they historically handle redundancy, and my rep told me they will try to avoid paying what they should. But as the figures appears less than statutory redundancy according to .gov, that is what makes me think I must be misunderstanding things somehow.

Brie

Calculations should be done on gross salary.  If your salary fluctuates I suspect they will take an average but won't be including overtime. 

But if you were getting £200 salay a week 16 years back and have had increases over the years that shouldn't be a factor.  It should be based on your current salary. 

Working the HR's figure backwards if they are suggesting £4.5k for 24 weeks then they are basing that on your currently weekly salary being about £187.  Is your figure of £460 based on a salary or do you have an hourly wage with hours differing week to week.  

ChasingtheWelshdream

II have always been on a salary and have been at this grade/hours for the last 5 years. The only change has been our standard yearly pay rises.

I am glad I have challenged them and am not missing something really obvious, so will wait for their reply.

The only thing I can think of, is I have a separate zero hours contract with the same employer (averaging £50-100 per month if that). They have said that is unaffected by this redundancy and I can continue in that, but I am wondering if they are making any reductions due to that. 

sheramber

Is the zero hours income included in your £460  or is it paid separately? 

ChasingtheWelshdream

The zero hours is included on my payslip, but is listed separately and easily identifiable. My payslip states: Xxxx role: salary: £xx.xx (never varies)

If applicable that month, the zero hours is listed by the hours I have claimed for each shift. The T&Cs and hourly rate are different to my contracted role. 

Deductions for tax, insurance and pension are calculated from the total amount, although I have two different pension % deductions due to the difference. These are listed separately. There is no ambiguity.


I have used only my contracted salary to calculate my weekly pay. Both by monthly salary X12, divided by 52. And just in case, my contracted weekly hours x £xx.xx. Both return £460 (rounded for this post).

Still no response from HR. I suspect they have not calculated the whole 16 years continuous service , but I can’t make their figure work to any of the timescales I can guess - eg my actual commencement date  with the company, or even the duration of this particular role. 

ChasingtheWelshdream

A response.  

HR  agree my weekly pay but will not include my whole service in the calculations if I maintain the zero hours contracts, only the ‘chain’ that led to my current role. (I am disputing the chain dates but that is a separate issue).

It is more beneficial for me to relinquish the tiny zero hour contract than lose several thousand in settlement.

This is a voluntary redundancy and I am not feeling particularly valued if they are willing to play things that way. 😔

kimwp

It's possible that they have to calculate it that way to be strictly "fair" between employees.

TJD_76

When working out my redundancy figures it came through as expected. I used one on a teacher pay website, where you could drop the weekly cap limit.