Redundancy advice required (please)

Dirk Diggler

Dirk Diggler

Dirk Diggler

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I'm looking for general advice on the redundancy process, please.

Hypothetical situation is that employee has 12 years service and is now being made redundant after consultation period has ended.
  1. Are they due 12 weeks notice?
  2. If they aren't required to work the notice, will they receive the pay on day of termination of employment?
  3. If yes to 2, how is the pay calculated?
  4. Can the employer pay 80% furlough as notice payment?
  5. Will the employee receive redundancy payment as well as notice, and if so how is it calculated?
  6. If the employer decided to rehire the employee on different terms & conditions, would this affect redundancy payment/process?
 
Evilpaul said:
looking at the pages for a company making redundancies (i.e. the other side of the fence) gives information about it here:
https://www.acas.org.uk/manage-staff-redundancies/work-out-redundancy-pay
Click to expand...

Great help mate, thanks for that.

It's not great reading as it's based on the last 12 weeks. I'm hearing that companies on our site are basing it on furlough payments, but maybe that's close to the cap if it's maximum furlough? I'll need to work that out.

I'm hoping the 12 week scenario isn't used to calculate notice in lieu as that would fall way short of an average weekly pay for the year, even at maximum furlough rate.
 
on redundancies i would have thought that they would have to take it over the yr under the circumstances .or at your full pay rate as uk gov is paying you not them ..
but i would think a tribunal would sort that out ..
 
Dirk Diggler said:
I'm looking for general advice on the redundancy process, please.

Hypothetical situation is that employee has 12 years service and is now being made redundant after consultation period has ended.
  1. Are they due 12 weeks notice?
  2. If they aren't required to work the notice, will they receive the pay on day of termination of employment?
  3. If yes to 2, how is the pay calculated?
  4. Can the employer pay 80% furlough as notice payment?
  5. Will the employee receive redundancy payment as well as notice, and if so how is it calculated?
  6. If the employer decided to rehire the employee on different terms & conditions, would this affect redundancy payment/process?
Click to expand...

1) Depends what notice your contract says - if 12 years of service requires 12 weeks notice, some companies may end your contract early with PILON.
2) I think when we went through this a few years ago PILON was just added to your redundancy payment, so you had 1 payment rather than 2. Although i'm not sure if the tax free status only applies to the redundancy payout and not PILON.
4) I wouldn't have thought so no, that's a real ***** move by an employer if they try that. The whole point of the JRS was to encourage companies to keep jobs.
5) Calculation depends on whether you get statutory minimum, or if the company has a much better scheme - don't you normally receive a payment calculation as part of the consultation period? - we got ours pretty early in
6) I think most companies do have a clause that says if you return to the company within X years regardless of the job role, you'd have to pay back the redundancy money.

Edit: https://www.moneyadviceservice.org.uk/en/articles/do-you-have-to-pay-tax-on-your-redundancy-payout Just looked at this, so expanding on point 2 above, it's only the redundancy payment that is tax free, any unused holiday, PILON, bonuses etc gets taxed as normal.
 
Dirk Diggler said:
I'm looking for general advice on the redundancy process, please.

Hypothetical situation is that employee has 12 years service and is now being made redundant after consultation period has ended.
  1. Are they due 12 weeks notice?
  2. If they aren't required to work the notice, will they receive the pay on day of termination of employment?
  3. If yes to 2, how is the pay calculated?
  4. Can the employer pay 80% furlough as notice payment?
  5. Will the employee receive redundancy payment as well as notice, and if so how is it calculated?
  6. If the employer decided to rehire the employee on different terms & conditions, would this affect redundancy payment/process?
Click to expand...

1. Yes, unless the contract allows them to be paid in lieu of notice.
2. No, payment will be due on the normal payday.
4. No.
5. Yes, statutory minimum is 1-1.5 weeks for every year of service up to 30 weeks or £16k, ofc contract may be more generous.
6. Don't understand the question, the position is either redundant or it isn't.
 
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Energize said:
Don't understand the question, the position is either redundant or it isn't.
Click to expand...

Thanks for the clarifications.

On this point, yes it's a little bit different.

As a result of the reduction in workload, we propose to reorganise the workforce to suit the future requirements, resulting in a [reduced headcount]

Furthermore, for the positions that remain, we propose a change in terms and conditions...
Click to expand...

We haven't been advised of the specifics other than that it's going to be a reduced team, on a greatly reduced salary with an uplift depending on where and when you are required to travel to site.

What I don't understand, is how this will work in practice. Do I need to accept the different terms and my service continues with no redundancy? Or, do they have to terminate employment and rehire on the new terms, having paid redundancy in the process?
 
Energize said:
Basically you have the option of agreeing to the new terms or being made redundant.
Click to expand...

What a dilemma. I assume they could make me redundant 12 weeks later and the payment would be calculated on the much lower rate (and I mean massively lower if I hadn't worked on site during those 12 weeks).
 
If you are over 40 you might get even more than 12 weeks as some of it will be paid at 1.5x. I would take the redundancy, sounds like an organisation in trouble and you don't want to take a massive pay cut only to get shafted later.
 
Energize said:
5. Yes, statutory minimum is 1-1.5 weeks for every year of service up to 30 weeks or £16k, ofc contract may be more generous.
Click to expand...
Are you sure it is up to 30 weeks? This link - https://www.gov.uk/redundancy-your-rights/redundancy-pay indicates just 20 as the statutory maximum.

E: actually rereading, it's at multipliers depending on age. So could be 30 weeks if entire 20 year career at company started at 40!
 
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