Redundancy payment - what is a reasonable amount to be seeking?

[MollieO]

Have been made redundant, effective this week. First I knew was the service of an at risk letter a week ago. Have had a meeting and pointed out lack of consultation. Was expecting an email with time frame today but instead it was a termination date.

On top of payment in lieu of notice and holiday pay they have offered statutory redundancy pay and an additional sum equivalent to 6 weeks pay. I have been there 4 years and it is a 'professional' job (if that makes a difference). I've also been asked to sign a compromise agreement.

Does this sound reasonable or should I request or be expecting more? It won't be easy to find another job.

They are being generous. They only have to pay you notice period (which you can expect to work) and statutory redunancy pay (there's a calculator on the DirectGov site).

So I'd say in paying you in lieu of notice, holiday pay, statutory redundancy pay and six weeks extra, they are being very generous.

It's a done deal so I would be asking for more tbh. Do you have anything to lose by doing so? If you're a professional maybe they expect negotiation and this is an opening gambit.

The ex-gratia payment is presumably in exchange for you signing a compromise agreement waiving your rights for an unfair dismissal claim. Tribunal awards for UD are often quite crap, but I guess I would set out the various ways in which the process has been unfair, my likely loss and, bearing in mind the cost (to them) of fighting at Tribunal (and the fact that costs generally can't be recovered), a counter-offer.

I suppose you could just accept the 6 weeks, (which is the only element which exceeds what they have to pay) but if the business is ongoing (which I assume it is) they must be anticipating saving at least a couple of years' salary. So go for a bit more, it doesn't need to be a massive fight but there's no harm in responsing with a request for a bit more, surely?

That was what I was thinking. Someone said to me that they wouldn't be asking me to sign the agreement unless there was something to compromise. I'm thinking one months pay for every year of service. Although I am good at negotiating on behalf of others I am a bit apprehensive of doing it on my own behalf.

If they pay me in lieu of notice they save on their pension contributions and health insurance so not as generous as it may appear. They definitely don't want me in the office at all.

I saw it more that they were compromising ie: you were being allowed to finish straght away, but given your pay for what would have been your notice period, had you not been leaving straight away?

Your friend is not necesarily right - I've put someone on garden leave before now (ie: I agreed to let them hand in their notice, with no reutnr to work required, and full pay for notice period, rather than me going through the disciplinary process with them - they would not have had a case for unfair dismissal) and asked them to sign a compromise agreeement. They'd not have had a case at tribunal.

Do you have access (eg via a union) to a lawyer who could give the agreement a once over?

A compromise agreement being issued doesn't necessarily indicate the company believe you have a good tribunal case. Some companies use them routinely when paying over statutory in redundancy situations. Others use them to cut corners procedure-wise.

However in terms of negotiating the amount, it will depend entirely upon whether the company believe you have a good tribunal case, how much they think you might be awarded at a tribunal, and how likely they think you are to want to go that far.

How good a case do you think you have? What was the reason for your selection for redundancy?

if it's a compromise agreement they will need to pay legal fees for you to get it checked out anyway so you can explain the circumstances to your solicitor and ask his/her opinion of the amount.

Complicated reasons but think I have a good unfair dismissal case. They increased their original offer by another two weeks following our first and only meeting. We didnt discuss ex gratia payment in that meeting only the lack of consultation, the lack of evidence of choice and explanation of selection criteria and scoring. Absolutely not a case of me being made redundant instead of being dismissed.

I'm waiting for the draft agreement and I suppose that is the stage when I go back with an amount I will accept in return for my signature? No mention of them paying legal fees for that though.

The agreement won't stand up unless they've paid legal fees for you to get it looked at.

When they issue you a draft agreement they should at that point tell you to go and see a solicitor, and probably tell you a maximum (reasonable) amount they will pay for that.

At that point, find yourself a solicitor, explain what you believe your case is to them, and ask their opinion on the amount.

Thx Flowery. I suppose I have been shocked at how quick this has happened, not helped by the complete lack of consultation prior to receiving the 'you have been selected for redundancy' at risk letter. As far as I know the other possible candidate wasnt told either that there was a potential redundancy.

As an aside, you wouldn't necessarily expect to be consulted before you are placed at risk. Frequently it's 'you're at risk of redundancy because x is happening, this is what we are proposing, give us feedback/opinions alternative suggestions before final decision made'.

Not saying they have consulted properly or anything - it all sounds a bit rushed and skimpy on procedure - just pointing out that depending on the situation you wouldn't necessarily consult with people who are not at risk so would therefore tell people they are at risk at the beginning of consultation.

I'm unfamiliar with redundancy procedure but I thought that I was supposed to be told by the company that they were considering redundancies in my Dept, then get a letter saying my job is at risk, then get details of selection criteria and scoring, then have another meeting to discuss at risk letter and scoring.

I had one meeting where they gave me at risk letter and completed scoring and then had a second meeting to discuss scores. Neither me nor the other colleague were told of any possible redundancy and other colleague did not receive at risk letter or scores.

Redundancy procedure isn't that specific. It's expected to be 'reasonable' and involve meaningful consultation. What 'reasonable' looks like will depend vastly on the situation.

It's fine to tell someone they are at risk before starting consultation if that's appropriate for the situation. If there are two secretaries in a department, and the decision has been taken to reduce secretarial support by half, there's no need to consult with the entire department, but clearly the two secretaries in question are at risk and it would be silly to pretend they are not before consulting.

Where it's more than one person at risk (ie a selection decision to be made rather than just one unique job going), they should both be told they are at risk, and provided with the criteria that will be (not have been) used for selection. They should be given an opportunity to feedback/ask questions about those criteria before they are applied, the idea is people should (in theory at least) be in a position to influence the outcome in some way.

Flowery is right on all of the above. Though I do think you can get the CAB to look at compromise agreement letters and they won't charge for it.

When I had my compromise they were listed as people that could "review it" and explain it to me.

Thx. It seems they have been back to front in their consultation. I need to get advice on whether an unfair or nor followed process would assist any claim I brought for unfair dismissal. If it would then I assume they may increase the offer if this is pointed out to them.

Hi, just to confirm although you may be able to get advice on a compromise agreement from the CAB it will not be legally binding unless it is signed off by a solicitor who has advised you on it. The employer should pay for this but there is no legal requirement for them to do so. Shop around in terms of who will do the compromise agreement for you, should be in the region of £250 - £500 +VAT depending on whether you are going to want help negotiating the money or if you just need advice on the wording and it getting signed off.

Unfair procedure can contribute to a finding of unfair dismissal but will not make it automatically unfair. If the employer can show that following a better procedure would have made no difference to the outcome then compensation would be reduced to reflect this.

some help on what their procedure should be here :
www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy/DG_10026616

Had to look into it myself recently when at risk letters were handed out in our office too. Wasn't even aware they might offer/negotiate more than the stautory amount. Something I will bear in mind if the rumours of more redundancies in 6months time turn out to be true.

Sorry you have lots your job and best wishes for finding another.

Thx. I assume they are offering an increased amount to pay me off. I've yet to receive a proper letter detailing all the financial stuff but the lack of attention to detail sums up my HR dept.

Well our company seem to be doing it right...

We had a meeting at which they told us we were at risk and gave us a letter to confirm this. We were given a timescale by which we'd be told who was going.

Then we had another meeting where we could put forward idea on how to prevent the redundancies

Then we had meetings to advise us of our score and who was going.

Those that were going then had a durther meeting at which they were given a letter detailing the finanical stuff and their leaving date.

gilly they sound very organised and professional. I had one meeting where they gave me the at risk letter and scores and another meeting where they justified their scores. There was supposed to be another meeting scheduled but instead they emailed me their decision and terminated my employment the next day.

Well they've not gone about that correctly I don't think.

Maybe they thought you'd take the extra money and simply go so they didn't follow through properly..?

I was told that our company were doing everything by the book as they knew how costly going to an industrial tribunal can be to the company while it doesn't cost the employee much financially. So they were doing everything right to avoid any chance of it going that way. (I was told the company pay their costs whoever wins so it gets expensive for them- but I have no experience to know if that is correct or not)

Have you contacted ACAS to get some advice
08457 47 47 47

If you scroll to the bottom of the link I gave you in a previous post you'll see the last section deals with help when being made redundant.
And then under that is links to more pages on what the procedures should be like notice periods and your reight to be consulted etc.
Good luck

flowery - can i just check?

if there are 2 people and 1 post is going, then you should both be told you are 'at risk' ahead of the criteria being applied? this would be standard best practice - but is not actually a legal requirement?

If the scores come out very differently (so say one person gets 80 and the other 120 out of 140 - is it a reasonable request for the lower scoring person to be able to see the scores/comments that the other person got?