Redundancy and MP

[jmac121]

Hi, first time post, hopefully someone can help me.

The hotel I work in is being closed for refurbishment on 21st December. The company currently in ownership is being wound up and the business will be transferred to a parent company. I start maternity leave on the 10th December. All employees have been given redundancy letters explaining what we're to be given. Everything is above board (correct redundancy pay, notice pay and even a small bonus). I'm not entitled to any maternity pay enhancement, just statutory, and this is being paid as a lump sum in December. Having spoken to HMRC, there is no way to pro-rata the National Insurance allowance across the maternity leave period, meaning 12% of my maternity pay will be lost. This seems incredibly unfair, and I ask anyone who's had any exposure to this situation to help me find the solution. HMRC stated to appeal to the company's better nature to get them to spread the payments, but surely this shouldn't be discretionary.

Additionally, I find it also highly unfair, as an employed person taking maternity leave, that I'm not also entitled to accrue holiday pay as I would be if the organisational restructuring wasn't taking place at the hotel. I'll be on maternity leave, unable to find a new job, and am being left worse off than any of my colleagues, who would be able to find new jobs and therefore be entitled to holiday pay. I spoke with ACAS, and they stated the company aren't doing anything illegal as I'm technically classified as unemployed once the redundancy occurs, but is there any legislation which protects the rights of mums in this situation?

My calculations suggest I'm going to be about £2500 worse off come next September than I would've been if the refurbishment wasn't happening, which is very substantial to me. Please help!

The problem is, if the company is being wound up, they won't be running a payroll after you've left, and therefore won't be able to make payments spread over a period. They will need to pay all the monies they owe various people, including staff, and then be wound up. So while normally a company could spread SMP payments for ex employees the same as for current employees, in your case this isn't possible.

The only thing you can do is point out to the company that receiving your maternity pay in a lump will incur you a higher tax/NI liability and ask them if they'd be prepared to meet the additional cost for you so you don't lose out. They don't have to, but they might.

In respect of holiday, as you know you don't accrue holiday once you've left employment. Again there's not a lot to do about that I'm afraid.

Sorry!

It’s a rubbish situation but who would pay you holiday pay when you won’t be employed after Dec 21St?

I'm afraid it is entirely up to your employer whether or not to pay SMP as a lump sum. They will also be paying more in NI contributions than if you were paid weekly so it is definitely worth seeing if they can be persuaded to spread payments.

I don't understand your second point at all. You will be in exactly the same position as any of your colleagues who doesn't get a new job. There is no legislation that says the employer must give you holiday pay when you are no longer employed by them.

Thanks everyone for your valued input. The point about employers NI contributions is a good one, it may help change the lump sum payment but not highly likely. What I'm really after is something in the maternity act which would basically state that being pregnant/having a baby means you shouldn't receive less than if you weren't, but the government seems to be winning here with tax and NI they wouldn't otherwise be getting. I also think that if the business is responsible for paying the MP then they should be responsible for paying holiday which would've otherwise accrued.