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Original poster

Keep redundancy money or pay it back?

33 replies

stickygotstuck · 15/04/2013 15:32

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?

OP posts:
PeterParkerSays · 15/04/2013 15:44

Why does he have to do either or?

He was made redundant from his original post, so is entitled to redundancy pay because his old post no longer exists.

He has subsequently been invited back again to a new job. Completely unrelated.

CantThinkOfAYoniPun · 15/04/2013 15:46

They aren't allowed to do what they are doing. It isn't legal. Get some RL advice.

OldLadyKnowsNothing · 15/04/2013 15:53

So, they're basically offering a "continuity of employment" thingy, if he repays? That could be a very generous offer, in terms of employment protection (you can sack someone for no reason for the first year), pensions contribution (do they put more in the pot for longer-serving employees?) and so on.

Check his old and new contracts.

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Original poster
stickygotstuck · 15/04/2013 15:54

Thanks Peter and CantThink.

Really?? Shock. Here I was, thinking it was normal!

Thing is, what they are suggesting kind of makes sense to me. I don't know what I'm talking about but perhaps I didn't explain properly -

DH was made redundant last month, was told he didn't need to work his full notice, was paid until the end of the month and given his redundancy pay (incl. holidays etc.)

He was then contacted at the beginning of this month asking would he like to interview for the new job.

Is it not possible (and legal) for them to consider him redeployed - rather than re-hired? And therefore he has been in continuous employment without a break?

Can the amount of time elapse make the difference here?

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PhyllisDoris · 15/04/2013 15:58

I would be most concerned about keeping length if service in case of any future redundancy situation.

They ARE allowed to ask for money back. Most companies will ask for a pro rata repayment based on the time between leaving and re-starting, up to a usual period of years. It will be in the T&Cs.
I think it's worth asking shy they didn't know about this vacancy before your DH left though. Seems like too much if a coincidence to me.

Original poster
stickygotstuck · 15/04/2013 15:58

Thanks OldLady for that perspective.

So do you think it may be worth going for the continuous employment?

I am just thinking now, what if DH then finds something better and resigns after about a year?

He doesn't have his new contract yet, it won't be signed until he tells them what he prefers. Was supposed to tell them today but have given him until tomorrow to decide. They way they are going about it makes us think it's all overboard. But neither of us has never been in this situation before.

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StealthPolarBear · 15/04/2013 15:59

Yes but why should he lose his holidays? Is that for the rest of his employment?

NatashaBee · 15/04/2013 16:00

This reply has been deleted

Message withdrawn at poster's request.

K8Middleton · 15/04/2013 16:01

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).

DontmindifIdo · 15/04/2013 16:01

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?

Original poster
stickygotstuck · 15/04/2013 16:02

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.

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CantThinkOfAYoniPun · 15/04/2013 16:04

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.

K8Middleton · 15/04/2013 16:05

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?

Original poster
stickygotstuck · 15/04/2013 16:07

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.

OP posts:
Original poster
stickygotstuck · 15/04/2013 16:10

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.

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K8Middleton · 15/04/2013 16:10

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?

K8Middleton · 15/04/2013 16:12

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!

OddBoots · 15/04/2013 16:14

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 · 15/04/2013 16:15

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

Sick pay
Holidays
PHI
Occupational paternity or adoption leave
Pension*

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

racmun · 15/04/2013 16:17

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.

MistyB · 15/04/2013 16:19

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!).

Original poster
stickygotstuck · 15/04/2013 16:24

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).

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K8Middleton · 15/04/2013 16:25

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.

K8Middleton · 15/04/2013 16:27

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.

Original poster
stickygotstuck · 15/04/2013 16:28

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!

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