Redundancy process vs Signing Without Prejudice offer

mrrossi

Hi all

After some advice please. I have been told my role is disappearing due to restructuring and I've been told I can go down the redundancy process route and they would give me a 3 months salary deal or I could go down the offer and "Signing Without Prejudice" (WP) route and take 3 months garden leave pay + a 3 months lump sum deal (30k tax free).

However, I've just double checked and my notice period is 3 months anyway, so wouldn't they have to pay me for 3 more months and then give me the 3 months lump sum, plus however long it takes to do the redundancy consultation (and given it's coming up to Christmas and people are off etc, that could take some time)?

I.e. what's the benefit of the WP offer here?

Not keen on gardening leave, as then I couldn't start a new job and I'm left at home twiddling my thumbs. Would it be worth trying to counter negiotiate for an extra months pay and immediate exit? Is that possible?

Many thanks

Rx

Brie

how much is the redundancy payment?

mrrossi

I think I've misunderstood the options!

Looks like it's consultation + 3 months notice + statutory redundancy pay (2K ish)
vs
PILON of the 3 months + an extra equivalent of 3 months pay (I don't want to say the numbers of here, but lets say the tax free element would be very beneficial) + statutory redundancy pay

I think in this case I'd be a fool not to take the offer?!

Someone else suggested negotiating to try and get more but I suffer from severe "British politeness" and not sure I could bring myself to ask when it's already a good offer! Also, would there then be any risk of jeopardising the first offer?!

learnandshare

Hi, having been through a similar process very recently, perhaps I can offer an input? Obviously without knowing the details of the offer made to you I can't be specific. I'll share the general gist of my experience. 

I had a choice: (a) consider a WP offer or (b) go through the redundancy process. 

(a)The WP offer would become the formal and legally-binding Agreement after it was accepted by me but before that it was conditional on taking legal consultation (to which the company would contribute costs of up to £500+VAT). I took that consultation and glad I did because I would have never understood the in-and-outs of the legalities. There were 2 parts to my offer: (i) the statutory PILON based on one month salary per year served - this cannot be negotiated; (ii) an ex-gratia (goodwill?) payment of whatever the company sees fit - this can be negotiated, and in my case my legal advisor got me an extra ~20%. It's tax-free up to a max of £30k but doesn't guarantee they will offer you that much! Also, it is standard that accepting an Offer Agreement denies you any opportunity for an unfair dismissal claim etc.

(b) If you want to go down the redundancy route, you are entitled to PILON and the right to claim against the company for whatever fits your circumstances.

That's all I know. Hope it works out for you

learnandshare

learnandshare said:

Hi, having been through a similar process very recently, perhaps I can offer an input? Obviously without knowing the details of the offer made to you I can't be specific. I'll share the general gist of my experience. 

I had a choice: (a) consider a WP offer or (b) go through the redundancy process. 

(a)The WP offer would become the formal and legally-binding Agreement after it was accepted by me but before that it was conditional on taking legal consultation (to which the company would contribute costs of up to £500+VAT). I took that consultation and glad I did because I would have never understood the in-and-outs of the legalities. There were 2 parts to my offer: (i) the statutory PILON based on one month salary per year served - this cannot be negotiated; (ii) an ex-gratia (goodwill?) payment of whatever the company sees fit - this can be negotiated, and in my case my legal advisor got me an extra ~20%. It's tax-free up to a max of £30k but doesn't guarantee they will offer you that much! Also, it is standard that accepting an Offer Agreement denies you any opportunity for an unfair dismissal claim etc.

(b) If you want to go down the redundancy route, you are entitled to PILON and the right to claim against the company for whatever fits your circumstances.

That's all I know. Hope it works out for you

Just spotted an error in my post.

I said "(i) the statutory PILON based on one month salary per year served".

If only that were true! It is in fact one WEEK salary per year served