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Keep redundancy money or pay it back?

(34 Posts)
stickygotstuck Mon 15-Apr-13 15:32:37

Was going to post in the Work section but not a lot of movement there, and a decision is required by tomorrow am!

DH was made redundant just a few weeks ago. He was then contacted by his old company saying someone left and would he like to interview for this person's job (a different role to his previous one). He got the job.

HR have asked whether he'd like to keep his redundancy money and lose his work benefits (holidays, potential future redundancy payments), or pay back the money and keep his benefits.

He had been working there for around 3 years, so we are not talking a massive amount.

What would you do? And also, what other benefits which we aren't thinking about would he be losing?

K8Middleton Mon 15-Apr-13 17:45:49

He may be ok if 31st is classed as his last day. I thought you meant 31st was first day of his unemployment. But yes, it is a week for break in service and any day of employment in the week counts with the week running to the Saturday.

stickygotstuck Mon 15-Apr-13 17:23:37

Thank you again K8, the trial period thing did not occur to me.

I have read somewhere that for a break in service to actually have taken place, there has to be a min period of one week (incl. 2 Saturdays). Technically, it was just one Sat I think. Unless they are taking the day he actually stopped working there physically as the final date, rather than the 31st of the month.

Oh dear, we were rather hoping it would be a clear-cut case of would you like A or B? B please, and that was that! Not so, I see.

K8Middleton Mon 15-Apr-13 17:12:43

Oh and I'd talk to a lawyer. I'd want it all air tight to ensure I actually was able to get the benefits of continuous service. I'm not sure I'd rely on HR to manage this correctly. If a lawyer's going to be too costly and HR can't/won't budge on the payment for intervening weeks I'd not be giving up the redundancy payment.

One other thing to bear in mind, is that if he is deemed to have continuous service and effectively be redeployed into a lower paid role he may have some rights to a trial period without forfeiting redundancy if he or the employer decide it's not working out and possibly rights to compensation for the change to his employment terms and conditions because this is not an equivalent role.

What's for sure is that this is considerably more complicated than just giving back the money as if nothing happened.

K8Middleton Mon 15-Apr-13 17:03:49

Hmm. I think because there was over a week gap they would need to be really careful about how they dealt with that including paying a salary because that's a fundamental part of the employment contract and this scenario is not covered by any of the legally recognised breaks in employment (possibly with the exception of temporary cessation of work). They would probably need to pay a salary for the period between offer and start date too although the case I looked at [Welton vs Duluxe Retail EAT] didn't cover that.

You need to do your sums and get the information about benefits. On the face of it the employer needs to do more than just accept the money back and pretend the redundancy never happened to preserve continuous service. I would not be agreeing anything until they have answered a few questions and if they need to give you more time so be it.

stickygotstuck Mon 15-Apr-13 16:44:11

K8, employment officially ended 31st March (although did not have to work full notice), offer made on 8 April.

K8Middleton Mon 15-Apr-13 16:41:23

The dates are potentially important. What gap between employment finishing and new job offer being made?

stickygotstuck Mon 15-Apr-13 16:34:22

Thanks K8, keep them coming, I am totally clueless about this!

K8Middleton Mon 15-Apr-13 16:31:00

If it's Defined Benefit or Defined Contribution pension scheme then check the employer's contribution and any death in service benefits.

Sorry for multiple posts. Thinking out loud blush

stickygotstuck Mon 15-Apr-13 16:28:13

MistyB you are spot on, it is a relief on one level. Redundancy is horrible - aside from the stress of the consultation period, there is what it does to your confidence sad.

I'll ask him to check pension details!

K8Middleton Mon 15-Apr-13 16:27:44

Then I'd probably keep it and look for something else. The continuous service is extremely unlikely to matter if he's leaving any way. The benefits don't seem to add up to much.

K8Middleton Mon 15-Apr-13 16:25:37

When did he finish and when was this employment offer made? Will they be paying him for the intervening weeks as if he had never left? If they are not then his continuous service may not be legal. This is important because if he is TUPE in the future or the company goes into receivership or similar he may need to evidence his continuous service because they will not be likely to want to pay out more than they have to.

stickygotstuck Mon 15-Apr-13 16:24:46

Thanks everyone again.

racmun, it is statutory redundancy pay.

k8 that's what I'm thinking - he won't get it later but he has it now. And there is a chance he may find something better and leave (the new job pays less than the old one, he's taken it as something to tide him over until he finds something better. Unless, of course, he is promoted and pay goes up accordingly).

MistyB Mon 15-Apr-13 16:19:42

Continuous employment may also impact the value of his pension and when he can take his pension / early retirement. He needs proper advice on this and HR should spell out all of the implications to him including an illustration of the impact on his potential future pension payments.

Great that he is no longer job hunting though I'd imagine! I hope he is not feeling too messed around as redundancy is a really horrible process to go through. He should take time to come to terms with this and accept any counselling offered because he may find it difficult to feel positive about his new job after everything I imagine he has been through (you too I bet!).

racmun Mon 15-Apr-13 16:17:42

I think in essence they're offering continuity of employment, by repaying the redundancy monies, it will be as if it never happened.

If its statutory redundancy pay then its hardly anything.

By having continuity he would immediately have his employment protection, he is was made redundant at a later date it would be backdated to when he first started anyway. Furthermore as far as i know you don't get employment protection against unfair dismissal for 1 year after starting and 2 years for redundancy.

Personally I would payback and keep employment protection rights. Read the contract carefully though.

K8Middleton Mon 15-Apr-13 16:15:56

Call them up and ask for details of the following if he took new contract:

Sick pay
Occupational paternity or adoption leave

Pension is the biggie. I assume your dh has already discussed salary?

OddBoots Mon 15-Apr-13 16:14:34

I'd give the money back, the continued employment is all the more valuable now they can effectively have a 2 year probation period (it used to be 1 year).

K8Middleton Mon 15-Apr-13 16:12:58

X-posted. In that case, without knowing the full details I would probably hedge my bets and keep the redundancy. 3 days holiday isn't worth it and if he gets made redundant in the future yes he won't have the extra years.. but he'll already have it now!

K8Middleton Mon 15-Apr-13 16:10:41

No it sounds as though they've paid him PILON (Pay In Lieu of Notice). This is fine and would have ended his employment so they can't just ask him to work it. If he was on gardening leave that is different and his employment would not end until the end of that leave.

Check the terms. I know of very few companies who offer amazing terms for just 3 years service vs 1 or 2 years (and that'll fly by). Are we talking final salary pensions and PHI or an extra month or week of holidays?

stickygotstuck Mon 15-Apr-13 16:10:33

Yes, Cantthink, they do mean the benefits of having been there for 3 years.

K8, I am not sure there would be too much of a difference. I think it all comes down to future redundancy pay and the extra 3 days' holiday per year he would be entitled to if continuously employed.

stickygotstuck Mon 15-Apr-13 16:07:42

Thanks Stealth, Natasha, K8, Dontmind!

Dontmind, he got the invitation just after the end of the month, like a day or two before, so I don't think they paid him too early, just bang on time. He did the interview a week into the month.

K8Middleton Mon 15-Apr-13 16:05:48

I think you need to ask them what benefits they are talking about because everyone has to offer paid holiday, everyone has to pay a salary, everyone has to offer a pension scheme of sorts. There might be a difference in sick pay or occupational paternity pay or private healthcare or car scheme or similar but without knowing who knows if he'd be better off?

CantThinkOfAYoniPun Mon 15-Apr-13 16:04:53

Ah, are they talking about losing the benefits of being there three years?

That woudl make sense. I thought you meant he wouldn't be given the usual benefits and holidays that any new starter would.

stickygotstuck Mon 15-Apr-13 16:02:44

Thanks Phyllis, that makes me feel better.
So another vote for continuity then.

It could be too much of a coincidence, but this person resigned because he found another job. Everybody knew redundancies were coming, so I suppose he did an interview for the other job, and wasn't offered it until after the redundancies were announced, IYSWIM.

DontmindifIdo Mon 15-Apr-13 16:01:54

so hang on, can I check I've got this right: he was still in the notice period where reasonably he could be expected to work if they wanted him too when they offered him another job. (the fact they told him to spend the time at home doesn't mean he had officially left the company's employment). However, rather than paying his redundancy payment at the end of his employment with them, they've paid it already when he's still officially on the books, just at home.

What they are now saying is he can officially 'leave then be rehired', keeping the payment they have already given him, but this means he will be treated as if he was a new employee, or he can give back the payment they gave him early, not officially leave, just be redeployed and therefore keep the benefits he's earned by having already been there 3 years.

(Basically they've screwed up by paying out before he's actually finished working for them if this is the case).

Do the sums, which is worth more to you?

K8Middleton Mon 15-Apr-13 16:01:47

Is there anything in his redundancy terms and conditions about reemployment? Many organisations have a requirement that there is a 6 month gap between redundancy and taking any new position.

If there's no clause then he might be able to keep the job and the redundancy pay but it sounds a bit like an HR balls up.

What's the difference between his old contract and his new one? What sort of benefits are they talking about?

He may be able to argue for continuous service in a future dismissal situation if his gap in service is less than a month - but I'd need to check that (I'm a bit rusty as on mat leave with teething baby so totally frazzled).

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