Redundancy

[jaybee]

I was invitied to an earlier meeting today, where they tried to offer me a Compromise Agreement.

At first I thought this could be a good offer, but soon realised they were trying it on.

1. They wanted me to agree to be terminated

Define "terminated". What have they said/stated? Is it in writing?

2. Settlement offer was lower than minimum redundancy package

By minimum, do you mean statutory?

3. They wanted to charge me a legal fee for the agreement

That's not the end of the world depending on total net settlement offer. Many companies consult legal firms to draw up final settlement agreements. It's not a red flag. How much was the fee?

4. I waiver all rights to take them to court

Totally normal in a final settlement agreement. That's the whole point in it. You agree for normally an enhanced package, to "SETTLE" once and for all and promise (legally) that you are satisfied and offer is final. Of course there would be no point in accepting this if it were not for an amount (usually significantly) higher than statutory.

 

[mysticsniper]

Blimey that's bad. Were they stupid enough to put any of that in writing ? You'd surely have them over a barrel. Worth asking around and seeing if they've tried to pull the same with other people too.

I have it all in writing, have spoken to ACAS who were very helpful

 

[NickK]

Define "terminated". What have they said/stated? Is it in writing?



By minimum, do you mean statutory?



That's not the end of the world depending on total net settlement offer. Many companies consult legal firms to draw up final settlement agreements. It's not a red flag. How much was the fee?



Totally normal in a final settlement agreement. That's the whole point in it. You agree for normally an enhanced package, to "SETTLE" once and for all and promise (legally) that you are satisfied and offer is final. Of course there would be no point in accepting this if it were not for an amount (usually significantly) higher than statutory.

Why would you be going through a compromise for redundancy? I mean they should simply go through redundancy.. the funny bit is they’re offering redundancy with string attached - also why would you pay their (possibly unlimited) financial bill? Do they actually mean they will not cover your legal fees if you elect to go down that route?

Personally it seems like they’re trying line up some trouble.

CAB do a grand job from experience.

 

[mysticsniper]

Define "terminated". What have they said/stated? Is it in writing?



By minimum, do you mean statutory?



That's not the end of the world depending on total net settlement offer. Many companies consult legal firms to draw up final settlement agreements. It's not a red flag. How much was the fee?



Totally normal in a final settlement agreement. That's the whole point in it. You agree for normally an enhanced package, to "SETTLE" once and for all and promise (legally) that you are satisfied and offer is final. Of course there would be no point in accepting this if it were not for an amount (usually significantly) higher than statutory.

Yes, I mean as statutory.

The Legal cost is £600+VAT.

I was expecting the statutory amount plus 50%.

To be honest the who situation has left a sour taste in my mouth.

 

[jaybee]

Why would you be going through a compromise for redundancy? I mean they should simply go through redundancy.. the funny bit is they’re offering redundancy with string attached - also why would you pay their (possibly unlimited) financial bill? Do they actually mean they will not cover your legal fees if you elect to go down that route?

Personally it seems like they’re trying line up some trouble.

CAB do a grand job from experience.

Not sure if you have had experience with these things but basically the whole point in a settlement agreement is you typically get massively enhanced redundancy pay out. As an example, in a previous company I was with, say statutory was like 5k. Enhanced would be like 15k. It was in your interest to take the settlement agreement on a pure financial basis. All legal fees were paid for and there was no requirement to sign it. Company set up an appointment with a solicitor (not their own internal legal department, so that it was impartial) and they then advised you on the deal and whether you wanted to change anything etc, or simply sign it. That's just an example of what some do. Not all.

Yes, I mean as statutory.

The Legal cost is £600+VAT.

I was expecting the statutory amount plus 50%.

To be honest the who situation has left a sour taste in my mouth.

I mean it depends what the total deal is. Are you saying if you take the settlement agreement they will give you statutory +50% -£720? I mean it's not great, but it's not the worst.

Do you in anyway foresee yourself wanting to make a claim against them for the redundancy not being fair in the future? If you think they will get someone in much cheaper, doing the same role and that they will be on thin legal ice, you can try calling their bluff and making a counter offer much, much higher. Or you can say nope, I'm simply going to not sign that and then take purely statutory.

At the end of the day, the sour taste is already there and tarnishing your outlook on the future of said place surely? More often than not in such circumstances it's best to take as much from this as you can financially, and move on, even if they will get someone in at half the rate arguably doing the same role. They will most likely lawyer up themselves if you try to make a claim, and often the claim can be less than it would have bene to have just taken enhanced settlement offer in the first place.

I would try to take emotion out of it. Think of it as an opportunity to move on but pocketing some cash as well. Do you have any idea of the kind of offers they have done for people in the past? It could be that they are low balling you and doing it for as little as possible, even if they value and appreciate your time there. Hands may be tied from higher up. I'm not saying have sympathy, but you need to treat this like a business transaction and negotiation. I would try a counter offer asking for statutory plus 100% and legal fees paid for.

 

[jaybee]

I have a mate who just went through redundancy. The policy there is that you can take statutory OR enhanced. If you take enhanced, you have to sign a settlement agreement. The below pay is made up, but the enhanced rates are real:

Annual salary £50,000 before tax = £961.54 per week gross earnings
45 years old
Been at company 8 years
Statutory is capped at £643 per week for anyone
So...

• 0.5 week’s pay for each full year worked when you’re under 22
• 1 week’s pay for each full year worked when you’re between 22 and 41
• 1.5 week’s pay for each full year worked when you’re 41 or older

Statutory =
4 years at 1 x £643 = £2572
4 years at 1.5 x £643 = £3858
= £6430


Enhanced replaces statutory at full weekly pay rate (not capped)

• 1 week’s pay for each full year worked when you’re under 22
• 2 week’s pay for each full year worked when you’re between 22 and 41
• 3 week’s pay for each full year worked when you’re 41 or older

Enhanced =
4 years at 2 x £961.54 = £7692.32
4 years at 3 x £961.54 = £11538.48
= £19230

 

[NickK]

Not sure if you have had experience with these things but basically the whole point in a settlement agreement is you typically get massively enhanced redundancy pay out. As an example, in a previous company I was with, say statutory was like 5k. Enhanced would be like 15k. It was in your interest to take the settlement agreement on a pure financial basis. All legal fees were paid for and there was no requirement to sign it. Company set up an appointment with a solicitor (not their own internal legal department, so that it was impartial) and they then advised you on the deal and whether you wanted to change anything etc, or simply sign it. That's just an example of what some do. Not all.

However it's a compromise - which means they're essentially offering additional money to add additional restrictive covenants before you leave. Probably because you have not got an updated employment contract with those in.. or they're scared you'll wonder off with their secrets.

If he's in cyber, a contract role would be earning ££££.

Agreed - see it without emotion, look where it benefits you.

Incidentally I've just come off a call where the G-CTO has announced they're starting a consultancy period, got my 1:1 tomorrow (as all have been requested todo so), and we'll see where I fit or not. Not my first rodeo (I think this is the 5th redundancy process - some stayed some departed) and been on the other side.

 

[NickK]

I have a mate who just went through redundancy. The policy there is that you can take statutory OR enhanced. If you take enhanced, you have to sign a settlement agreement. The below pay is made up, but the enhanced rates are real:

Annual salary £50,000 before tax = £961.54 per week gross earnings
45 years old
Been at company 8 years
Statutory is capped at £643 per week for anyone
So...

• 0.5 week’s pay for each full year worked when you’re under 22
• 1 week’s pay for each full year worked when you’re between 22 and 41
• 1.5 week’s pay for each full year worked when you’re 41 or older

Statutory =
4 years at 1 x £643 = £2572
4 years at 1.5 x £643 = £3858
= £6430


Enhanced replaces statutory at full weekly pay rate (not capped)

• 1 week’s pay for each full year worked when you’re under 22
• 2 week’s pay for each full year worked when you’re between 22 and 41
• 3 week’s pay for each full year worked when you’re 41 or older

Enhanced =
4 years at 2 x £961.54 = £7692.32
4 years at 3 x £961.54 = £11538.48
= £19230

It's funny, it's almost like they want the option to apply to those that have a competitive knowledge (that they can't block under statutory), or use the cost of living crisis to impose additional restrictive covenants that are new and more easily enforced.

 

[Ev0]

When I was made redundant earlier in the year I we were all offered a settlement agreement, where signing it got us an extra months salary as a redundancy (so tax free) payment.

I’d only been there 8 months so was happy enough with that as they didn’t have to give me anything!

On the legal fee side, I believe there was something along the lines of for a settlement agreement to be valid it has to be reviewed by a legal professional (or at least reviewed by someone). Most places let you pick/use your own solicitor though and offer to cover all the fee, or up to a limit (mine would pay up to £250, it cost £350).

 

[mysticsniper]

However it's a compromise - which means they're essentially offering additional money to add additional restrictive covenants before you leave. Probably because you have not got an updated employment contract with those in.. or they're scared you'll wonder off with their secrets.

If he's in cyber, a contract role would be earning ££££.

Agreed - see it without emotion, look where it benefits you.

Incidentally I've just come off a call where the G-CTO has announced they're starting a consultancy period, got my 1:1 tomorrow (as all have been requested todo so), and we'll see where I fit or not. Not my first rodeo (I think this is the 5th redundancy process - some stayed some departed) and been on the other side.

I created most of their secrets, and built the Secure Server, then wrote the Security policies. So I don't need to take anything away, afterall I spent 8 years helping reducing risk and threat landscape from state actors.

I had my first consultation, they claim there isn't enough work for my role, which is total ********, it didn't matter what I said, as they've made their decision already.

I am being sent a list of job vacancies, I figure they will use this as a way to not having to pay the statutory redundancy pay. If I reject the offer, without a suitable reason.

I challenged the first final settlement agreement, they are going to get back to me with another offer, wouldn't be surprised with another low ball.

 

[Housey]

A compromise gives them freedom and speed. I’ve used them a few times over the years to get people out of a business quickly. The offer would need to be significantly better than a redundancy offer to be worthwhile.

 

[NickK]

I created most of their secrets, and built the Secure Server, then wrote the Security policies. So I don't need to take anything away, afterall I spent 8 years helping reducing risk and threat landscape from state actors.

I had my first consultation, they claim there isn't enough work for my role, which is total ********, it didn't matter what I said, as they've made their decision already.

I am being sent a list of job vacancies, I figure they will use this as a way to not having to pay the statutory redundancy pay. If I reject the offer, without a suitable reason.

I challenged the first final settlement agreement, they are going to get back to me with another offer, wouldn't be surprised with another low ball.

Yep- it sounds like they want you out for some reason - I've had one company terminate me due to 'ability todo the role' when I've been in the role for almost two years (there was a clause in the contract that you're classed as a short term employee before you get the bigger packages), they had sold the company, closing the office (belonging to the out going unit boss), they fired my sales boss too, the culture stank (very much if you went to a top uni or you're talked down to) and opening a new office across the other end of the country plus.. they paid my sales bonus for the year too (I was ahead of the curve).. hence you get the impression that it wasn't anything todo with ability but more like they didn't want to pay for redundancies or relocation.. CAB basically indicated there wasn't really anything you can do being a "short term employee".

Yup - the half ***ed approach in offering the ability to apply for a role depends. If they refuse you for the role then you're still being made redundant but you're right.

Seems that they want a cheaper solution with two people.. but in the end it's a high risk to use people without experience. I suspect the last laugh will be on them and their customers.

Personally, the concept of using above statutory compromises with restrictive covenants quite distasteful. If there's a duration, the offer needs to cover your costs during that time not the cost to the company - being able to use your skills is a core piece of law (and they can't enforce that - just scare with the weight of the financial legal bill).

I left one place with 27K many years ago, and nothing in those covenants amounted to anything..

 

[NickK]

A compromise gives them freedom and speed. I’ve used them a few times over the years to get people out of a business quickly. The offer would need to be significantly better than a redundancy offer to be worthwhile.

Yep, there's a number of ways of doing this. It depends on the business culture in how they wish to treat the affected.

How they treat people is now a social media/PR consideration nowadays.

 

[MissChief]

Seems that they want a cheaper solution with two people.. but in the end it's a high risk to use people without experience. I suspect the last laugh will be on them and their customers.

More likely hire two, keep the best and fire the worst. While underpaying them both probably.

 

[mysticsniper]

I have received another settlement offer today; they are still trying it on.

The settlement figure for leaving today, is the same figures for working my notice period.

I've told them, there is no incentive to leave and I might as well work my redundancy notice. Unless we can reach a better settlement figure

 

[jaybee]

You mean they basically have asked if you will accept leaving sooner and they will pay off your notice period as well? So say 2 months extra added on?
Have you actually told them what you want? Might save time. You might be surprised. They might just accept and want it done.

 

[mysticsniper]

You mean they basically have asked if you will accept leaving sooner and they will pay off your notice period as well? So say 2 months extra added on?
Have you actually told them what you want? Might save time. You might be surprised. They might just accept and want it done.

Good point. I'll start with an outrageous figure, we can negotiate from there.

Will see how serious they are about getting rid of this role.

 

[mysticsniper]

I sent over my exit demands this morening, I told them I wanted £27k to leave the company by the EoB today.

Just waiting to see if they accept or give me a counter-offer

 

[Vanquish-Storm]

All the talk of statuary and minimum they will pay, does notice period not come into play? Say you had a 2 month notice period do they not need to pay that 2 months at full rate?

 

[mysticsniper]

All the talk of statuary and minimum they will pay, does notice period not come into play? Say you had a 2 month notice period do they not need to pay that 2 months at full rate?

Yes, paid at full rate including all holiday's, on-call, shift pay etc...