Redundancy - are work taking the piss?

[HappyGoLuckyGirl]

I've namechanged as this is a current situation and I've posted about my workplace before. Penis brakes, cancel the cheque, etc.

So, the workload in my department has dropped off dramatically over the past 8-9 months. We're all sat with nothing to do.

We've all been talking about whether or not they will go down the redundancy route and I said I would volunteer if it came to that (bored out of my mind and can't leave of my own free will due to a training contract).

Anyway, the head of our department had a meeting with the directors and indicated I would volunteer if they went down the redundancy route.

I was called to a meeting with the company secretary and handed a package with a letter stating they feel the department will benefit from a staff reduction of one.

They have drawn up a settlement agreement and offered me 9k in termination pay. I have to sign away my rights to any claims against them to benefit from this offer. Roughly 2.5k more than my statutory, they told me. They also told me statutory would be taxed so I'd end up with a lot less if I was made redundant through a consultation process.

The problem is, my statutory entitlement is 10.5k anyway! My contract doesn't have a pay in lieu of notice clause so the notice pay is effectively damages and is exempt from tax. Notice pay also has to include payments for benefits I would normally receive (car etc) which I don't think they've done.

They've also said they won't pay the last bit of a training course I'm on and if I don't accept the voluntary settlement they still won't pay it as I'm at risk of redundancy! Feels like they've backed me into a corner.

They've also not told anyone else in my department about the redundancy situation and told me to keep it absolutely confidential. Is this allowed? I thought they had to start the process and ask for volunteers formally? I've been taken to once side and had this settlement offered to me all the while being told if I don't take it I'm at risk of being made redundant anyway, but haven't informed any of my colleagues?!

They've said they will pay for me to get legal advice but the amount is capped at what I'm guessing is an hour or two at most.

It feels very backhanded. I've sent an email to the company secretary highlighting my concerns re. their offer vs statuorty so will see what comes back.

I'm on holiday for a couple of days then the company secretary goes away for a week and then the deadline is the day he comes back.

I've no idea why it's come out in one paragraph. I'm on the mobile app so apologies if it's difficult to read! And long

Speak with a solicitor who specialises in employment law.

They sound like they haven't done the homework on the figures but it doesn't sound that out of the ordinary. You've indicated you'd like to go if there were redundancies, they're in a downturn and have offered you a package, what's the issue?

Speak to a solicitor as you need to to sign the agreement anyway but it doesn't sound that complicated, your employer's contribution might cover their fee.

The first £30,000 of a redundancy payment in exempt from tax.

Have you checked the statutory redundancy yourself on the Government Website?
It's based on your salary, age and how long you have worked for the company for.

With a settlement agreement you have to have legal advice (which is funded by your employer).
Go through your contract of employment thoroughly before seeing a solicitor but he/she will point out anything that might be wrong with the agreement and it can be changed easily before you sign.
Sometimes a company will give you a bonus if you sign a confidentiality clause - something to keep in mind

Penis brakes?!

I did note that typo

Statutory of £10.5k seems high unless you've been there 20 years. Stat redundancy pay isn't taxable although pay in lieu of notice is.

I've altered the amounts slightly. I have been there 12 years though.

And my pay in lieu of notice is exempt from tax as it's treated as damages for breach of contract.

So your calculations and there's are different by £4K, I'd be querying that before anything else.

If they've genuinely calculated it wrong, then the new calculation should still be £2.5k over the statutory which will hopefully allow you to pay for the rest of the course yourself.

I haven't done payroll and HR for years but when I did people ALWAYS thought they were going to get much more in redundancy than they were actually entitled to.

With regard to PILON, it can still be taxable even if your contract has no PILON clause, if, by custom and practice in your company it has been paid.

Statutory redundancy (at about £300 per year of service, or £450 ish iff over 40) is tax free.

I would have thought they would sugar the pill a bit as you are a volunteer. After all, if you don't they will have to go through the full process.

I wouldnt be signing compromise agreements if I didn't get a fair chunk more than my entitlements, tbh.

They have to offer an amount for your legal fees, normally £300-£500. For relatively straightforward cases this will be enough. Acas are a good starting point for understanding what you are entitled to under law.

Email yourself notes (as detailed as possible) of all conversations. You might need it at some point if things get contentious.

Technically you may be right on the PILON but the company might push back on it due to custom and practice as stated above or due to application of the Gourley principle.

Go back to them and,say no ask for what you want. I went backwards and forwards with an issue like this,in the end they offered me a compromise agreement and l got triple what they first offered. Oh and get the legal advice.

OK this sounds scarily familiar...don't suppose its a company beginning with D is it?

Speak to ACAS

Have you got legal cover on your house insurance?

I was in a similar situation & spike with Acas who said I needed legal advice.

As I had legal cover with my insurance, I didn't have to fund much of the battle at all....& I won.

I would get them to agree to pay for legal advice and tell the solicitor you want to pay hardball - what have you got to lose.

I'm assuming by custom and practice that means if they have done it before and that is their normal practice?

If that's it then I don't know if they could argue it as redundancies have never been done before.

I don't think I have legal cover as I don't have buildings, only contents insurance (I rent).

I will speak with ACAS before calling an actual lawyer to see what they can tell me before incurring costs with a solicitor.

Agh, this is all so stressful. I naively thought they would offer me a fair settlement for my time and contributions to the company and not try and manipulate me out whilst trying to save money! Lesson learned.

In your position I haggled. A lot. The company didn't want to be seen to be making redundancies- hence offering settlements even though they were basically redundancies. Once they've made that offer they don't want people staying because they know all loyalty is gone. I ended up with about 50 percent more than initially offered

I wouldn't get too carried away with tales of getting massive amounts. Whilst you want to get the best deal for yourself if you don't agree they might just put you at risk of redundancy anyway and you may only end up with statutory then. Try and get yourself a good deal but be wary of getting greedy and potentially shooting yourself in the foot.

Just point all of this out not saying yes or no and see how they respond.

If you don't ask, you don't get - go back with a counter offer, and haggle your way to something in the middle.