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redundancy - do you get your notice period?

17 replies

tonton · 06/10/2008 11:25

I think i may soon be made redundant. terrifying as am breadwinner with large mortgage!
Will I be paid my notice period (3 months I think)? Or is it just the one week per years of employment thing?
I have only been here 18 months so really hope I am entitled to be paid my notice period!

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Kewcumber · 06/10/2008 11:27

You will be entitled to your contractual notice period but they are entitled (depending on what your contract says) to ask you to work it rather than pay it to you as a lump sum.

It may or may not also be taxed depending again on the terms of your contract.

When/if you are selected for redundancy they should give you a letter explaining what you are entiteld to.

tonton · 06/10/2008 11:29

god how scary. I was sort of relying on the lump sum to give me time to look for another job.

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ilovemydog · 06/10/2008 11:31

It depends on a whole range of factors, but there is an entitlement to 'payment in lieu of notice'in addition to a redundancy payment. It's all fairly negotiable, but while redundancy payments are tax free, one has to pay NI on payments in lieu of notice as it's deemed salary.

Kewcumber · 06/10/2008 11:34

many companyies will pay it as a lump sum tonton as they don;t want people who have been made redundant hanging around. You are legally entitled to time off to look for work if they make you redundant and expect you to work your notice so you would still be able to job hunt.

zubin · 06/10/2008 11:38

You are only legally entitled to any redundancy payment after 2 years continuous service with your employer

flowerybeanbag · 06/10/2008 11:40

You are entitled to be given 3 months notice of your redundancy, and yes it is common to pay in lieu of notice when it's a redundancy, although not compulsory - they could ask you to work all or some of it.

Bear in mind that as you have less than 2 year's service you are not entitled to redundancy pay. See here about redundancy pay.

Kewcumber · 06/10/2008 11:40

but you are entitled to your contractual notice period regardless of length of service.

CountessDracula · 06/10/2008 11:42

The same happened to me a few years ago

I was paid my 3 months notice in a lump sum but it was taxed. As I had been there less than 2 years I wasn't entitled to any redundancy pay tax free

I also converted my 15% nc pension and some other benefits into cash for the last 3 months and took that in the lump payment

flowerybeanbag · 06/10/2008 11:43

years'

Kewcumber · 06/10/2008 11:45
flowerybeanbag · 06/10/2008 11:46

It was leaping out of the page at me!!

tonton · 06/10/2008 11:49

oh cripes....it does not look good. Money to be taxed...no redundancy pay.
but will endeavour to keep chin up!

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Kewcumber · 06/10/2008 11:51

redundancy pay is a pittence anyway so don;t lose sleep over that.

Its not a dead cert that your pay will be taxed. There are many issued to take into account, you can;t generalise. Sometimes a company will pay you untaxed qnd tell you its up to you whether you declare it for tax.

When will you know?

CountessDracula · 06/10/2008 11:51

do you have any benefits that you can take cash value for?

Kewcumber · 06/10/2008 11:53

also some companies will give expgratia payments (depending on their financial position) we recently gave redundancy pay as an exgratia payment to employees who didn;t technically qualify for it.

RibenaBerry · 06/10/2008 13:22

Tonton - do you know how many people are going to be made redundant?

As others have said, you are legally entitled to be paid your notice period one way or another. You can either be asked to work it (in which case you can use that time to find a new job) or be paid a lum sum in lieu. As others have said, sometimes this will be taxed and sometimes not (it's complicated. Whether they have to or not relates to the wording of your contract, plus their normal practices). If they don't have to tax it, most companies will still pay you the gross sum (although, if they want to be tight, they can pay you the net). The contract wording also affects whether you get the value of benefits if you are paid out.

On top of that you will get any accrued but untaken holiday, plus any other contractual entitlements (e.g. if you have a sales bonus which is already due).

As you know, as someone with less than two years' service, you don't get statutory redundancy (it's tiny anyway), but a lot of employers who have enhanced schemes give this to anyone, or anyone with more than a year of service.

Finally, if 20 or people are to be made redundant (at one place within 90 days), they have to consult with you for 30 days. If it 100 or more, the consultation period is 90 days. This gives you a lot longer to find a new job. If they don't do this consultation, you can be in line for an additional payment of 90 days' salary to compensate you (even if the consultation was only meant to last 30!).

tonton · 06/10/2008 17:02

Thanks for your res;onses.
Ribinaberry i doub it will be as many as 20 people - probably more like 5-10.
Re contracual entitlements, i don't think my bonus is due until next spring so i'll lose that I guess.
Maybe I'll post again when I know what they're porposing to offer me.

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