To say they should just take the redundancy?

[TheBeatGoesOn]

Sister has worked for a company for 15 years on a 20 hour contract. Got told yesterday that they can offer only 6 hours going forward. If she accepts, her redundancy rate in the future will go down hugely won't it? I kind of feel she is better off accepting the redundancy money. Would you agree?

Yes if she was made redundant in the future it would be based on her 6 hours

Is she actually being offered redundancy now?

Yes that’s correct. So they would need to make her redundant or she accepts the 6 hours. Although, If they could come to an agreement where they make her redundant and re-employ her on the 6 hours ...

Has she got the choice of being made redundant?

Although, If they could come to an agreement where they make her redundant and re-employ her on the 6 hours ...
Why would an employer want to pay out additional costs unnecessarily?

It's a choice of accept the 6 hours or redundancy

I’d want more information before making a decision.
Yes, redundancy would be based on a 6 hour contract, not 20.

But say she was made redundant in 23 months time from her new job.

She’d get nothing (I’m assuming company with statutory only).
In current job she’d 16 weeks x 6 hours.
Lots more.

You haven’t said whether current company is statutory only or enhanced.

It doesn’t sound like 6 hours only is going to offer any meaningful career development - but I’d consider that. If it’s a big company that she trusts to increase her hours when possible, or likely to get another 20 hour contract from an interval application, I’d stay put and turn down redundancy.

If she doesn’t like the job - take the money and run.

I think it depends on many things, I've seen been situations where a company has told everyone they have to make cut backs.

Then 6 months later a new project kicks off or some people leave to retire or work at other companies. Before you know it the work levels are back to normal (or busier than before!!)

If she really likes the company and realistically thinks there is going to be a bounce back, maybe she could try hang on until things start to return to normal (obviously this might not be an option financially).

Also, the way you have written your post suggests you don't know all the facts, you are assuming she has been offered redundancy, and it will go for in the future (although if she is only working 6 hours a week it probably would!!)

Depends on all sorts of things - how likely is she to find another job if she leaves? Is it the type of industry where if she is out of it for a while it will be very difficult to get back into? Is there a realistic prospect of her hours at this job being increased again in the foreseeable future? Would she welcome a change of career, know what her alternative is and can use the redundancy money to set up in her new career?

I would take the redundancy rather than the reduced hours. Yes, if she reduces her hours, future redundancy would be based on that, she could be made redundant very quickly after accepting reduced hours.

I agree Florence and there's a high chance she will be.
I didn't get much out of her on the phone as she was crying so hard. All I know is that it is either choose the 6 hours or redundancy.
Not much chance of the company bouncing back quickly either.

She needs to try and look at it dispassionately which is hard for her currently

What are her out goings
Chance of finding another job
State of the company overall
Any benefit entitlement if she accepts redundancy
Her age and state of her pension, it’s unlikely but is it final salary?

Three of my friends have accepted redundancy, two have had very big payouts and one had just inherited a lot of money. Two others I know were offered but didn’t accept as they are both main breadwinners and couldn’t afford to risk no job and chances of another job are slim for one and the other almost no chance.

I think she needs to speak to ACAS and she is entitled to:
Redundancy pay which varies from .05 weeks per year worked under 22 years, 1 week per year up to 41 and 1.5 years after 41 - this is tax free
Pay in lieu of notice of 3 months
Holiday pay at 20 hours weekly

This is also what she needs to consider:
On 6 hours a week she is unlikely to be paying NIC which will affect her pension, ability to claim SMP or SSP. Whereas if she is redundant she can claim Job seekers allowance and NIC paid.

These are uncertain times until there is a vaccine and Covid-19 is no longer the threat it remains.

I think the main issue is if she accepts a 6 hour contract, if she is then made redundant 4 months down the line, then her payout will be massively reduced. That's what would concern me if I were her.

I will tell her all your comments, thank you.

I think (but I could be wrong - memory is hazy) that if she’s made redundant in the future, her payout will be reduced significantly because they’ll base it on 6 hours for her entire working period with them. They might even be able to only offer payout for the new contract period - meaning she’ll get fuck all if it’s less than two years.

Please make sure she investigates this thoroughly though as I’m only going on my own experience which was two years ago now, so likely incorrect.

I think I'd take the redundancy- obviously it's hard to say without access to details, but plenty off pp have explained why.

Poor her. My DH was made redundant and so many people I know are facing it. It's going to be a really hard time for lots and lots of us. I hope she finds an alternative soon- what sort of work does she do?

Yes, overall, it would be very detrimental to her. It's unlikely the company will be able to offer her anymore hours then the 6. If it folds, as you have all said, she will be looking at no/reduced redundancy.
I really feel for her. She is so worried about it all. So many people are in the same boat as well, truly awful times.

Not necessarily, it depends on what she can negotiate.

What are the chances of the company surviving the next 3 - 12 months?

It should be possible to negotiate a situation where she agreed to drop to 6 hours (or maybe tries to negotiate up from that to 10 hours) but there is a caveat that says if she is then made redundant before X date - say 30 June 2021, she will be paid redundancy at the rate of her current hours, before any reduction.

Then she would have to find a part time job to fit in around the existing role.

Redundancy money is quickly swallowed up. Can they just reduce her 20 hour contract to 6 when shes been there all these years.

I think they will survive but by the skin of their teeth.
I will inform her of what you have just mentioned though. I think she would take the 6 hours if there was a guarantee that she would still get her redundancy pay as it stands now.

I think she should cut her losses and take the redundancy. Even if the business picks up again there's no guarantee that it's her role that gets given additional hours. It's such a large cut that there is barely a role at all.

I also doubt they would be open to honouring the current redundancy package In the future though she can ask of course.

I think if the business is unstable/unlikely to increase hours in her role then redundancy is for the best. I know so many people who have been offered new contracts on only a few hours. It's such a sad and anxious time for everyone. Feel badly for everyone in that position.

Also, will she end up having more work that she can fit into 6 hours thus putting her hourly rate even lower?

Yes there is also that.
I have sent her all these replies on the thread and she said they are very useful.

I think she should take the redundancy now. Presumably at 6 hours per week, she'd need to look for a new job anyway and the redundancy money (should be 15 weeks salary) should cushion things a little rather than going straight onto only 6 hours a week salary.

It does depend on what she does and how likely it is she can get another job on a similar salary though.