Redundancy payment not what expected

[FrenesiGates]

Hi all – looking for some advice...
I was given notice in August this year that I would be made redundant in mid-November (due to losing the client I work work for). I have been working for the company for 6 years and was given the option of taking on a new role at my company or taking a redundancy. I was given a "preliminary redundancy compensation schedule". This listed: Statutory Pay (6 weeks salary capped at £525 / week); Pay in Lieu of Notice –if requested (6 weeks salary); and Outstanding annual leave (payment for holiday days I hadn't taken), with a total amount listed. Understandably (I think), I took this amount to be the amount of compensation I would get if I chose the redundancy option.
I had been considering going freelance for some time, and this seemed like a great way to do this as it would make the transition a bit easier. It would also give me the opportunity to spend time with family in Australia (who I don't see often as I live in London) for 5 weeks in Jan/Feb as I would have the buffer of the redundancy payment.
I had two separate consultancy meetings and discussed my options and gave notice I would take the redundancy. Yesterday, I went to sign the final paperwork only to discover that the "Pay in Lieu of Notice" is not actually going to be paid to me. This is about 63% of the payment I was counting on and puts me in a very difficult position as I would have made completely different decisions if I had have known this – e.g. taken one of the other jobs offered to me; seeked out full-time / part-time work instead of going fulltime freelance; not taken holiday days in that period in order to maximise the outstanding annual leave owed to me; not booked flights to spend 5 weeks visiting family...
Now that I understand that the "pay in lieu of notice" is not part of the package they are offering me but a payment that would be made if I were immediately made redundant before working my notice period, I am confused as to why this was included on my compensation schedule to begin with. At no point was I ever going to be made immediately redundant as the contract didn't finish for 4 months. No one in management or HR brought this up during the consultancy period either and I feel as if I have been misled and let down by the entire process. This is the first time I have gone through a redundancy (which my employer knows) and so I am not sure of the process – I assume if I'm handed a piece of paper with a compensation schedule on it that that is what I will be compensated.
I now have 5 weeks until I leave this job and am feeling incredibly stressed out –with the payment I will be getting, once I pay off the flights I have booked, I will have literally nothing left of my redundancy payment (I was relying on having approx. £5k more to fall back on.) The issue is made even more complicated by the fact that I was planning on relying on my current employer for a portion of freelance work (they confirmed during the consultancy period they would like to continue working with me freelance as needed) and so I need to remain on good terms with them.
What should I do?
Thanks

edit: when I say "losing the client I work for" –this was nothing to do with me or my performance but to do with changes in the industry that are completely outside of the control of myself or my employer.

There's not much you can do, I assume they are saying you are now working your notice period?

You could appeal to their goodwill and explain how you relied on the document they have you and ask if they can give any of the notice as pay in lieu at the end, see if they will meet you half way.

@VanGoghsDog thanks – I thought as much... I tried that yesterday and my manager is speaking to senior management to see if there is anything that can be done but said she doesn't think there will be any additional payment. There are four of us who all assumed the same thing – and we all made the decisions we did based on the figures we were given.
It's also not the first time that the HR here has let me down badly (the first was a visa issue) so it's incredibly frustrating.

Pilon should have been taxed anyhow so you never would have got the gross figure. Sounds like incompetent hr to be honest.

Can you leave now and get a temp job until you go?

Claiming a tax rebate after you lose your job this might help depending on how quickly free;acne work comes in

@stupidboyman you're right about HR... the start date on my initial compensation schedule was incorrect; and then I realised she was using the incorrect day rate to calculate my holidays owed... I did realise that the Pilon would be taxed, and had worked that into my planning..
If I left now I would leave the client, the company and my team in the lurch and it would rule out any future freelance work with the company... (and I don't think they would pay out the Pilon in that case anyway). I also don't think I'd be able to get a temp job that quickly, so it would basically be like going full time freelance 5 weeks earlier than anticipated... I'm really upset about the whole thing as I thought I had planned everything so well and worked out all the financial considerations etc and now I'm left in a position where I'm going to be really struggling to make ends meet at a time of year where freelance in my industry is difficult anyway..

@OliveOwl –thanks! I'll look into it, but I'm not sure I'll be eligible as I already do bits and pieces of ongoing freelance work (not a lot – and certainly not enough to make ends meet – but think it will mean that I'm not counted as unemployed...

You don't have to be unemployed to be due a tax rebate, that link is very bizarrely written. You just need to have overpaid tax.

I also recently received some redundancy money, PILON, holiday pay and a months pay all in one month, and as the employer pays cumulative tax it tipped me into the tax band for those earning over £100k, so I paid 45% on some of it, which isn't what's due as I won't earn anything like £100k in the tax year - so I am due a rebate. I'll wait til the end of the tax year though as I'll probably dump some in the pension too which will reduce the 40% band as well.

Same happened to me as @VanGoghsDog

Was paid PILON and outstanding leave - which tipped me into new tax band (they assumed this was new monthly wage!). Next, I get a letter from HMRC saying I owed 8k in unpaid taxes. Eek! Anyway, I called them to say this is a one-off, and the new role would keep me in the same tax band. They reverted the tax code there and then. Phew.

But yes, holiday pay/PILON are all taxable. HR sound incompetent. I am always extra careful when dealing with redundancy payments as I don't want to add to an already stressful situation. Query the figures as much as you can if you are sure your calculations are correct.

6 weeks sounds like an odd notice period though

Would it be possible for the 4 of you to get together and discuss to management en masse? Seems likely that HR has been, at best, unclear, if all four of you misunderstood but misunderstood in the same way. Sounds like you have been misled.

• discuss with management.

I would phone ACAS and ask their advice, you have been misled and the company need to correct this by re presenting you with your options based on corrected information

@rickytickytembo – this is what I think (that we've been misled) and it has had huge implications on the decisions we've all made. I'm sure it wasn't intentional, but it certainly feels as if HR has fallen down in their duty of care during the process
We have spoken with management and they are currently speaking with upper management but have said there is very little chance anything will be signed off...

@yukka – that's a good idea, I will give them a call tomorrow. Unfortunately, the other opportunities at this company have since been filled, so that's no longer an option; and I have already booked my travel (non-refundable) for Dec/Jan/Feb, which means it will be almost impossible to get a job before then (as I only finish here in mid-Nov) and will be away for 2 months (as I'm also away over Christmas). I would never had booked so much time in Australia if I had have known this would be my financial situation... it's really put me in a difficult position

I'm also interested in whether it is standard practice to include the PILON amount in the compensation schedule if this is never going to be applicable given the situation. Does anyone know?
It seems really misleading that it was included in the first place, given that there was always going to be work up to mid-November (and I received the schedule in August)

I'm really sorry that you're in this stressful situation but I don't understand why you ever thought you were going to be paid a figure that was clearly labelled as 'pay in lieu of notice' when you were being given notice? What did you think it was for? I have some sympathy for HR here because if, say, I was given a list of possible payments that included 'pay for clinical duties' I would think 'well, I won't be getting that because I don't have clinical duties' - and I wouldn't expect to be explicitly told that. Did you literally not understand the phrase? I would guess that HR thought it was pretty standard.

Pay in Lieu of Notice –if requested (6 weeks salary)

Did you request pay in lieu of notice?

And you do realise that you would have be worse off if you had taken it because your employment would have ended in August?

@LisaSimpsonsbff Having never been through the redundancy process before I thought this was part of the package being offered. It seems naive on reflection, but it was a very stressful period, I was given a piece of paper with a figure on it as my "compensation schedule" and no one every indicated to me (or any of the others affected) that this wasn't the actual figure that we were discussing. As mentioned earlier, the schedule was presented in a way that all of us made the same assumption. Tbh–I barely looked at the individual items on the schedule, and focused on the figure that said "total" in larger font and bold letters. My manager (who hadn't seen this schedule previously) looked at the letter in our meeting yesterday and immediately asked HR why it had been included in the first place... so I don't think it's too ridiculous to have assumed that the "total" on the schedule I'd been handed was the total compensation I would receive (and I never received any kind of updated schedule after letting them know, in August, that I would be taking the redundancy).

@leghairdontcare I requested a meeting before my notice period was up to sign the final paperwork (as assumed it would need to be signed before this period). As above, I thought this figure was part of the package being offered and was so stressed out by the situation that it didn't occur to me that they would include figures on my compensation schedule that could never be part of my compensation package. It was never an option to end my employment in August as I head the team that deals with the client and the contract isn't up until mid-November (even if I had have handed my notice in in August, the PILON would never have applied to me as my job would still exist).

I guess – now that I have a full understanding of what PILON refers to – that I'm wondering why it was ever included on the schedule (as this doesn't seem to be standard practice if it doesn't apply from what I can find online).

Again, I have a lot of sympathy - I can see that you're in a really stressful situation - but I just don't think you're going to get far with trying to get them to pay you thousands of pounds because, by your own decision, you didn't actually read the paperwork before making a really important decision.

So, when did they actually give you notice of termination of employment by reason of redundancy? Have they even dine that?

I assume, by the way, that you have six years service and are under age 41?

And, by the way, this is quite clearly a breach of TUPE legislation, the dismissal is automatically unfair as it was solely or primarily due to the transfer.

I think it might be worth you talking to an employment lawyer, do you have any legal cover on your house or car insurance?

The OP hasn't mentioned tupe, @vangoghsdog?

OP, I appreciate you think it wasn't practical for your employment to end in August but from their point of view, you could have asked for pilon and they could have paid it and ended your employment. As you didn't ask, and instead worked the notice period, you have been paid over and above what you would have received for pilon. So although you think you have lost out, you have actually been paid more by virtue of your employment continuing into mid November.

Are you a member of a union? Are your colleagues? This sounds like a decent shot for a bit of collective bargaining.

I know they haven't mentioned TUPE, I can read, thanks

I've also worked in outsourcing for many years and when you lose a client to a competitor it is nearly always a TUPE situation, esp as the op was told there was a role in the new company if they wanted it

It would certainly not be the first time an employer has failed to tell an employee of their rights now would it?.

It needs to be followed up.

HR Bod here. redundancy quotes are usually illustrative and may include a payment in lieu of notice but whether or not you'll actually be made to work your notice is a matter for your employer. Some don't want unhappy employees hanging around, some want to work every last day out of you, others may decide to part pay and part work notice depending on other factors such as when it makes sense operationally to make the change. Its really in their hands.

I would take 'if requested' to mean if the employer requests you to take it in lieu of notice. Doesn't make sense if its the employee, who'd request NOT to take PILON?

Sounds like they have communicated badly but not done anything technically wrong.

As for TUPE, depends totally on the client and whether they are still continuing their business. Client may be packing it all in to retire for all we know! Too little info to say whether TUPE applies

PILON tends to be paid more in circumstances where the actual company/place of work will stop trading, move buildings/areas etc so the employee(s) have to stop working right away but get at least 1 weeks pay if they have been there 2 months - 2 years and 1 weeks pay for every year they have been there if they've been there at least 2 years.

So in your case, you'd get 6 weeks PILON but only if they put you out of work there and then. Instead, they have given you notice that you can work until mid November because the company is still trading and staying in the same place, they just don't require certain staff anymore.

Since they wrote 'if requested' asking for PILON is most likely something you can do. You could have said you wanted to stop working for them right away and got 6 weeks PILON but then you'd not be earning anything between now and mid November. You usually can't get both. You either leave right away and get PILON but forgo earning anything as you won't actually work your notice or you work the notice period, earn your wage but don't get PILON