What happens to Contractual benefits if they pay maternity pay as lump sum?

[trixymalixy]

Flowery, I'm hoping you can help on this!!

I am being made redundant and my employer is talking about paying my maternity pay, redundancy pay and PILON as a lump sum when I go off on mat leave.

They are saying that they wouldn't have to pay any of my contractual benefits that I would be entitled to on mat leave such as pension and childcare vouchers.

Does this sound right?

It depends when your employment ends. If it's ending at the end of your maternity leave, then you would be entitled to accrue benefits during your leave.

But if you are not employed, you don't get benefits. Your statutory entitlement to SMP isn't affected if you leave employment during or just before maternity leave, but that's all you get - you don't continue to accrue holiday if you're not employed.

If you are being paid in lieu of notice then whether you get benefits (or increased compensation to reflect benefits) that you would have accrued during your notice period depends on your contract.

If your contract says your employer can pay in lieu of notice, there's no requirement for them to take into account benefits you may have accrued during your notice period;they can just pay you a month's salary, or whatever your notice period is.

But if there's no PILON clause in your contract, if they choose to PILON that's effectively a breach of contract, so the money you get is basically compensation for your employment ending without the contractual notice, so in that case you can and should argue for benefits to either continue or be taken into account for what would have been your notice period.

Does that make sense?

The offer they have made me is to terminate my employment when I go off on mat leave at the end of June, so it looks like they are right and wouldn't have to pay me my pension etc.

There is a PILON clause in my contract, but it's my option, they can't force it on me.

I have done a quick calculation and I would get the same amount as they have offered me if I requested PILON at the end of my mat leave, but I would get my maternity pay, pension contibutions and childcare vouchers while on mat leave on top of that, plus I would pay less tax on it.

So I'll just say no and pray that the company doesn't go bust in that period!!!!!

It's a bit short sighted of them as the counter offer I made would save them a lot of money!

Oh, and thank you Flowery for clarifying that for me, you've been a great help!

No problem. Yes if it's voluntary to the extent that you get a say in when it happens, definitely as late as possible to get all your benefits.

I have to request PILON before my notice period starts, so I wouldn't normally have a say in when it would be paid.

But because our redundancy policy states that they have to suspend my notice period until after my mat leave finishes I do have a say in that I can choose to go off on mat leave before they even serve me notice.