Why would company offer enhanced redundancy terms!

[LateEaster]

Is it because they know they could suffer challenges to the legitimacy of pay offs and what would enhanced terms be?

Can be a way of making the process "nicer". Those who want to leave get extra money and those who don't want to leave have an increase chance of getting one of the remaining jobs.

Alternatively settlement agreements (not redundancy) offer enhanced terms in exchange for waiving the right to a future claim.

It’s usually to induce people to go. Because they get more money.

So quite usual then...

All employees are under threat pretty much, but rumours of enhanced terms with the waiver included.

How much money do they normally give.

People left behind in work, would there be chances of pay rises etc

If it's en masse - so that they can say they have avoided compulsory redundancies when they need to get rid of staff.

Individually - because they want someone to leave fairly quickly and without a fuss.

Enhanced terms will vary from employer to employer and on a case by case basis.

It's on mass and each team is being looked at and cut

would there be chances of pay rises etc

I'd say it's doubtful because large-scale redundancies are usually a cost-cutting exercise, but if you end up with extra responsibilities it would certainly be a good idea to negotiate for a rise.

I took enhanced redundancy.

And walked away with a payout that let me pay my deposit on my house and go for further qualifications.

For me it was a great thing.

A lot of larger companies do this because they don't know where all the skeletons are buried. Decision makers are so far removed from day to day that they end up signing off on some explosive situations.

I was 'genuinely' made redundant with an enhanced package. The decision maker didn't know I was disabled. That I'd been refused reasonable adjustments for 18 months. That I'd been refused an occ health assessment for 14 months and told to work from home rather than make the office accessible during a 6 month refurbishment. I'd been refused a low cost computer application that would have improved my productivity, then one of the redundancy criteria comments was around productivity. I suffered mental health problems because of the lack of support and had begun counselling when I was made redundant. I'd been there 7 years and became disabled after 5 1/2 years. I'd previously been very capable and high performing.

My legal advice at the time was to take the money. I would not get as much in a tribunal, have to pay my own fees and would not get a reference while waiting 18 months + to get it finalised. I needed to move on for my mental health.

My experience is this is done because the redundancy is not due to employee performance but due to business needs, and the employee is respected and a regretted loss. As such enhanced terms shows an element of respect and regret.

From my experience in the civil service, enhanced redundancy is the first part of a two stage process: to encourage people to take redundancy voluntarily. (It's great for those like PP who can use it as a springboard.)

The second stage is some sort of selection process (who stays, who goes). Those who go have compulsory unenhanced redundancy.

If it’s unionised then they may have a negotiated policy that they have to follow for redundancy payments. It is not necessarily a sinister thing.

Brilliant thanks Ronnie, also it's not taxed .

Some have union negotiated redundancy schemes. Some might offer enhanced terms as a way to attract volunteers. As for how much they usually give it’s a how long is a piece of string.

It wasn’t sinister in my case. They were making cuts and asked for,voluntary with enhanced terms before they went to compulsory.

Is there a redundancy strategy eg get interviews in now... and try and get job lined up ?

It’s standard that the first £30k of a redundancy payment is tax free, you do get taxed on notice paid in lieu and any holiday allowance remaining.

In redundancy they may bring in outside consultants to help with cv etc and they’ll let you out for interviews no bothee, in my experience.

ACAS has good information about redundancy. It’s a bit tricky to advise you on such little information. Can you divulge any more details about what’s happening?

It can be paid tax free up to £30000. Anything over that is subject to tax and NI.

People left behind in work, would there be chances of pay rises etc

They’ll often use the mass redundancies as a reason for not being able to give pay rises. I think that the job left behind and how it’s going to be if you stay also needs to be considered. I took voluntary redundancy in my last job. They also paid enhanced pay but would have done even if I’d been compulsorily selected. I decided that even if I stayed the job was going to not be the same after such a big change.

I'd definitely be starting a job search if redundancy is on the cards.

If you can line up another job, any payout you get is then extra money rather than something you have to use to live off. Even if you can't line one up, getting into the swing of applications/interviews early will help you find one more quickly.

To incentive people to volunteer to be made redundant thus avoiding compulsory redundancy.

There are actually 2 parts to redundancy pay depending how the company treat it. In the scenario I went through I think it was actually handled very well and the company were very considerate to the employees. It was a merger and relocation situation.

There is notice and redundancy pay. You are entitled to a weeks notice as well per year you have been there I think and then capped at a certain level. I believe this would be taxable. Then there is the redundancy element which is not taxed.

So in my case I had been there 12 years so was actually entitled to around 24 weeks money (full not capped) as it was a mass redundancy and the company did not make anyone work their notice.

Is there a redundancy strategy eg get interviews in now... and try and get job lined up ?

Well it’s up to you. I started looking right away and got a new job to start at the end of my notice period so I didn’t have to use my redundancy payment to live on. Some people took a few months off before deciding what to do next. If you do start looking though just make sure that if you get something else that you’ll still get the redundancy payment if you end up serving them counter notice. The rules around this can be complicated so take some proper advice

Yeah they might pay you in lieu of notice or they might ask you to work the notice. My company did the latter. That was a fun 12 weeks!