Redundancy Retention Payment

valleymatt

Hi there. I don't know if this is the right place to put this, but thought I'd give it a go.

I was recently made redundant after 14 years at the same company. 9 months before being laid off, I was called in by HR and told that I would be given a retention payment (of several thousand pounds) on top of my redundancy pay if I stayed with the company until the end rather than leave for another job before my official finishing date. Only about 6 people in the company were offered this, me being one of them.

Over the next 9 months, I did have a couple of job offers but turned them down because of the incentive of the retention payment. However, my company then turned round at the end of the 9 months and said that they had become insolvent, called in the receivers and told all employees that we would have to put our own claims for statutory redundancy in as the company could no longer pay us anything.

What I'd like to know is whether or notI have a claim against the company/receivers for the retention payment based on turning down other jobs and being given the details in writing beforehand. It's been frustrating for everyone throughout this ordeal, and this is just rubbing more salt into the wounds.

Any advice on this matter would be much appreciated. Thank you.

VM

therealdessie

You might have a breach of contract claim, but if they're insolvent you have to consider whether you're likely to ever actually see the money!

valleymatt

Thank you for your response. Whilst the company did become insolvent, it was also bought by another company who relocated and settled outstanding debts etc. As part of the buy-out, shouldn't my company have informed the new purchasers about those of us who had been offered retention payments?

therealdessie

If it was a contractual/written agreement then absolutely yes, it's a liability on the receiving company who bought the business and its debts - I'd definitely follow them up with a claim.

valleymatt

Thanks again. I will speak to the CAB on this matter and see where it leads. Nothing ventured, nothing gained...

timbellina

It's worth following up on - you never know, BUT the usual formula for these things is that the purchasing company buys a specific list of assets and liabilities, and all other assets and liabilities, whether disclosed or undisclosed, remain with the original company as it gradually slides down the tubes.

If the new company actually bought out the entire share capital of the old company, then you're on a winner; but that's incredibly rare. (and there are other insolvency routes to protect the buyer, as well - I don't know if your company went into insolvency, or administration, for example). As the buying company, you seriously want to limit your exposure to liabilities, and if the company you're buying went under; there's usually no way of knowing what you're getting into.

Good luck!

Tim

floss2

Did you have this "retention payment" offer in writing?

valleymatt

Yes, I have it signed in writing. It clearly states that I must not inform any other employee about the retention offer or it would be withdrawn. It also says that even if the copmany continued and I kept a position in the new structure, I would be entitled to a bonus equal to 50% of the retention offer.

floss2

I think you need to speak to HR, armed with a copy of that letter. And also speak to CAB or your solicitor.

cazziebo

Sadly I've been through this with a previous company and any contractual or additional payments were not honoured. Everyone who left prior to the company going into liquidation got the enhanced notice, enhanced redundancy pay etc. Those left at the end got the statutory minimum - for example people on three months contractual notice left with only the legal minimum - in one case it was three weeks. We also didn't receive final salary until about six weeks later ie we were not paid on our normal pay date. It really was a terrible time.

One of my colleagues did take this up with the insolvency liquidator and also went to an employment lawyer) and I think ex employees may have become creditors, but didn't get anything.