Uk redundancy

[Sam101]

Unfoarunately my son has been notified that he is to be made redundant. He has been with his firm over 6 years, during which time the company has been split and changed, but his service has been continuious. Many people along the way in these changes have been made redundant.

The reason given was that his job is no longer available due to changes that will make his section non existant. The only job offers were at two branches that were many hours away and so, were not suitable for that reason.

The company have offered enhanced redundancy payment, payment in lieu of notice etc and advised him that he may seek legal advice but if he uses the legal representative of the company, then they will pay for those services.

The reason for this post is to ask about the Terms of Agreement that he has been asked to sign, on which he has yet to be avised. The agreement shows all the terms and clarifies that the first £30,000 of redundancy pay is not taxed, but goes on to say that he accepts that he is not neing made redundant, but leaving employment.

Something sounds very wrong with this.

If there is a delay in him finding a new job, will he become unable to claim unemployment benefit by leaving rather than being made redundant?

What will he miss out on by falsifying his signature on such a document and although being made redundant, is signing to say he is leaving?

What will the company gain by getting an employee to sign this when is is actually being made redundant.

I am just concerned that he is being asked to sign something that is incorrect in his any my understanding.

Sam

[seduraed]

Re: Uk redundancy

welcome to Lb . all i can say is that i don't like it . My feeling is that there my have errors made in the consultation process for making him redundant and the leaving employment ploy is a way out a potential mess.
I hope he makes good use of the redundancy money . Savings limits for couples a £16000 hlf that for n individual. My advice on that front is to pay off s much debt as possible with the money . and put the rest except the statutary maximum into his pesion fund where it will grow and not be counted as savings.

[Sam101]

Re: Uk redundancy

welcome to Lb . all i can say is that i don't like it . My feeling is that there my have errors made in the consultation process for making him redundant and the leaving employment ploy is a way out a potential mess.
I hope he makes good use of the redundancy money . Savings limits for couples a £16000 hlf that for n individual. My advice on that front is to pay off s much debt as possible with the money . and put the rest except the statutary maximum into his pesion fund where it will grow and not be counted as savings.

I don't like it either.
If the company are making someone redundant, which they are, why should that start off with an agreement that tells a lie, saying the employee is leaving? Smacks of sharp practice in some respects, but don't know why. Perhaps there is some benefit for the company in not having too many redundancies on record, rather than employees just 'leaving'

Would be interested in anyone else's comments on this please.

Sam

[des8]

Re: Uk redundancy

Hi
Although I'm not really into employment matters I was concerned to see the employers offer to pay for legal assistance if your son uses the firm's representative.
Hardly unbiased advice.
I understood it was normal practice for an employer to pay or contribute to an employee's legal costs from an employment specialist.
I would advise obtaining such advice.
There might also be a problem with the first £30,000 being tax free if HMRC decide that your son was not made redundant but "left".
I don't know, but taking into account the little you have told us, it sounds fishy.
You might find this link useful http://www.thisismoney.co.uk/money/g...good-deal.html

[krypton]

Re: Uk redundancy

The agreement shows all the terms and clarifies that the first £30,000 of redundancy pay is not taxed, but goes on to say that he accepts that he is not being made redundant, but leaving employment.

Something sounds very wrong with this.

Are you sure you are reading the terms correctly? It maybe you have mis-read or misunderstood the terms and the whole redundancy process.

It sounds like your son has been placed under consultation. He has been told his job is at risk due to redundancy and in the event they cannot find another/alternative placement for him then his job will unfortunately then in due course be made redundant.

It's very common for company's to offer enhanced packages to help save all the parties concerned on the whole consultation process and help former employees on their way as well as save the employee stress of the situation.

It is therefore not uncommon that employees in that situation decide to jump before they are pushed. There's no longer going to be a job there and they're getting an enhanced lump sum.

As with all agreements like this the company will want your son to agree he will not in future make a claim for unfair dismissal against them. In other words forgo the right to be able to make a claim.

For those reasons companies offer the selected employees to have the documentation reviewed and advised by an independent legal advisor. It is quite normal for them to offer to pay the costs for this.

You son will need to decide is there actually going to be a job in that company for him if he follows through the whole consultation process ? Has the company treated him indifferently in selecting him for redundancy? Are there any reasons to suggest his redundancy is unfair? Finally, if what they are offering is financially more attractive anyway, is it not better to take the money and move on and find another job?

Any PILON he is due will be taxable. Any further statutory or enhanced redundancy sum will then be tax free up until the £30,000 threshold.

Redundancy is a legitimate form of dismissal. I doubt it would have much impact on your son in future employment as redundancies are quite common. If asked his reasons for leaving it would simply be redundancy due to re-structuring and close of his particular place of work.

TBH it all sounds pretty normal, so I would suggest you read the terms more carefully and take stock of the whole consultation process and situation.

[Sam101]

Re: Uk redundancy

Are you sure you are reading the terms correctly? It maybe you have mis-read or misunderstood the terms and the whole redundancy process.

It sounds like your son has been placed under consultation. He has been told his job is at risk due to redundancy and in the event they cannot find another/alternative placement for him then his job will unfortunately then in due course be made redundant.

It's very common for company's to offer enhanced packages to help save all the parties concerned on the whole consultation process and help former employees on their way as well as save the employee stress of the situation.

It is therefore not uncommon that employees in that situation decide to jump before they are pushed. There's no longer going to be a job there and they're getting an enhanced lump sum.

As with all agreements like this the company will want your son to agree he will not in future make a claim for unfair dismissal against them. In other words forgo the right to be able to make a claim.

For those reasons companies offer the selected employees to have the documentation reviewed and advised by an independent legal advisor. It is quite normal for them to offer to pay the costs for this.

You son will need to decide is there actually going to be a job in that company for him if he follows through the whole consultation process ? Has the company treated him indifferently in selecting him for redundancy? Are there any reasons to suggest his redundancy is unfair? Finally, if what they are offering is financially more attractive anyway, is it not better to take the money and move on and find another job?

Any PILON he is due will be taxable. Any further statutory or enhanced redundancy sum will then be tax free up until the £30,000 threshold.

Redundancy is a legitimate form of dismissal. I doubt it would have much impact on your son in future employment as redundancies are quite common. If asked his reasons for leaving it would simply be redundancy due to re-structuring and close of his particular place of work.

TBH it all sounds pretty normal, so I would suggest you read the terms more carefully and take stock of the whole consultation process and situation.

Thank you krypton for your more detailed information.

It may be as you say. However, there is no problem at all about signing an agreement for the company with all the protection clauses they require, but the 'redundancy' has not been explained to my son in the way you suggest.

He has had notice of possible redundancy and had a meeting in which the company explained that his particular job will not exist under a structure change and no similar position is available in the company. They offered positions at two branches in the North, which were several hours drive away and therefore not appropriate. Presumably they were offered to cover themselves, but far to far away to be realistic for anyone.

After over 6 years with the company, the enhanced package offered is not considered unreasonable, including PILON and he does not consider that he has been treated unfairly.

The job at the company will not exist and he is the only one doing that job, so redundancy is what the company have selected. Not really a 'possibility of', but actual redundancy as no job exists with the company changes.

The main point is, why is he being asked to make a false declaration and say that he is leaving, when there is no alternative and redundancy is why he has to leave. No RISK of redundancy, the job he has been doing will not be there.

If all other terms are acceptable, surely the company can state the real reason as Redundancy and not that he has opted to leave, which is untrue and he would prefer not to, as he has been happy in his work.

It seems that this point may be something that will benefit the company in some way. Also if he were to say he leaves employment, rather than being made redundant, could this have some effect on unemployment benefits ...... I don't know?

Sam

[krypton]

Re: Uk redundancy

Your son is currently under consultation. He has simply been notified of a redundancy situation where he has been selected and is now at risk of redundancy.

The company must go through a proper consultation process before finally serving notice on your son. When notice is served and a final date given that would be the point your son is actually made redundant and not before.

Therefore, if he accepts an agreement beforehand it cannot and will not state redundancy. Simply because he would be choosing to leave before he is actually made redundant and had not seen the whole consultation process through.

Your son could wait and go through the whole consultation process in the hope another job in the company will come up. If it does great. If not the company is not at liberty to continue to extend the enhanced package they are offering to your son right now. You should understand the company does not legally have to pay your son anything more than the statutory sums which I imagine would be considerably less than what he is currently being offered as part of a package right now.

There is nothing wrong with what the company is doing. It is perfectly normal.

If your son chooses to accept the offer then it would need to be reviewed and advised by a professional legal advisor.

I would suggest you advise your son to think it over. If he doesn't accept their offer then the company may then choose to retract the offer and see out the consultation process which as you say will invariably see him losing his job. At that point the company will likely only pay the statutory sums not the package they are offering him at the moment.

There also doesn't sound any unfair element to his selection and as to why they have selected your son. I'm afraid it's just one of those unfortunate 'life' things your son is going to have to accept.

If the offer is good then it would make sense to take it now. Alternatively he could try to negotiate for a bit more. There's no harm in asking if he accepts it's academic he's likely to lose his job anyway.

I wouldn't worry about his reason for leaving being stated as redundancy or not. It's easily explained to future employers that the company was re-structuring and he was at real risk of redundancy. In a way it looks good that your son chose to act pro-actively.

[Sam101]

Re: Uk redundancy

Your son is currently under consultation. He has simply been notified of a redundancy situation where he has been selected and is now at risk of redundancy.

The company must go through a proper consultation process before finally serving notice on your son. When notice is served and a final date given that would be the point your son is actually made redundant and not before.

Therefore, if he accepts an agreement beforehand it cannot and will not state redundancy. Simply because he would be choosing to leave before he is actually made redundant and had not seen the whole consultation process through.

Your son could wait and go through the whole consultation process in the hope another job in the company will come up. If it does great. If not the company is not at liberty to continue to extend the enhanced package they are offering to your son right now. You should understand the company does not legally have to pay your son anything more than the statutory sums which I imagine would be considerably less than what he is currently being offered as part of a package right now.

There is nothing wrong with what the company is doing. It is perfectly normal.

If your son chooses to accept the offer then it would need to be reviewed and advised by a professional legal advisor.

I would suggest you advise your son to think it over. If he doesn't accept their offer then the company may then choose to retract the offer and see out the consultation process which as you say will invariably see him losing his job. At that point the company will likely only pay the statutory sums not the package they are offering him at the moment.

There also doesn't sound any unfair element to his selection and as to why they have selected your son. I'm afraid it's just one of those unfortunate 'life' things your son is going to have to accept.

If the offer is good then it would make sense to take it now. Alternatively he could try to negotiate for a bit more. There's no harm in asking if he accepts it's academic he's likely to lose his job anyway.

I wouldn't worry about his reason for leaving being stated as redundancy or not. It's easily explained to future employers that the company was re-structuring and he was at real risk of redundancy. In a way it looks good that your son chose to act pro-actively.

Thank you again.

A completion/redundancy date has already been given for next week and arrangements made to meet with the solicitor acting for both parties and further advice can be sought then. My main concern, as stated, is that in signing a statement saying he is leaving, rather than accepting redundancy, may leave him in a weak position regarding unemployment benefits to which he may be entitled should it take time to find another position. Can you say if that would be so?

Sam

[Mineral1]

Re: Uk redundancy

Thank you again.

A completion/redundancy date has already been given for next week and arrangements made to meet with the solicitor acting for both parties and further advice can be sought then. My main concern, as stated, is that in signing a statement saying he is leaving, rather than accepting redundancy, may leave him in a weak position regarding unemployment benefits to which he may be entitled should it take time to find another position. Can you say if that would be so?

Sam

They don't give you owt til you have used up the redundancy.... However if you happen to leave??????

[Mineral1]

Re: Uk redundancy

Do you know if his contract stipulates what redundancy pay terms are or is is statutory
In which case how old is he??? How many FULL years working for the company... You get nowt for for 2 years... :-( On direct gov website theres a checker where you can enter the details and it tells u how little you get

[Sam101]

Re: Uk redundancy

Do you know if his contract stipulates what redundancy pay terms are or is is statutory
In which case how old is he??? How many FULL years working for the company... You get nowt for for 2 years... :-( On direct gov website theres a checker where you can enter the details and it tells u how little you get

This has already been covered in the post and replies.

[Sam101]

Re: Uk redundancy

They don't give you owt til you have used up the redundancy.... However if you happen to leave??????

Thanks. So you don't know. Does anyone know the answer please.
Sam

[Mineral1]

Re: Uk redundancy

The answer is (I think) your son can toddle down to the job centre and show them his leaving bonus, redundancy etc etc and see what good it does in the eyes of DWP
They will ask.... I like others CANNOT sit there and suggest he were to try and engage in anything but being open with them as I'm sure such would be not honest
I'm sure he will be looking hard for something meantime and I for one wish him the best of luck

[des8]

Re: Uk redundancy

His main claim will presumably be for Job seekers allowance.
Last time I looked there were two types:
Contribution based JSA. If he has been paying NI contributions for the past couple of years he will probably get this. It lasts for 182 days,and he wouldn't get anything for his partner (although it could be topped up by Income based JSA.) It is not affected by savings/capital
Income based JSA ,This depends on the amount of income he may have and savings/ capital,

If he needs to claim other benefits as top up the chances are his capital will be taken into account.

Just to complicate matters "universal credit" is being rolled out gradually across the country.
If you have to claim Universal Credit it seems the capital limit of £16000 applies immediately

But the rules are complicated and depend a lot on the claimant's circumstances, and we don't know eg if your son has a partner, children.mortgage/rent etc

[krypton]

Re: Uk redundancy

My main concern, as stated, is that in signing a statement saying he is leaving, rather than accepting redundancy, may leave him in a weak position regarding unemployment benefits to which he may be entitled should it take time to find another position. Can you say if that would be so?

Sam

Not sure why this concerns you so much. If he is not working he will be unemployed anyway. I doubt the reason of redundancy or not is likely to effect his benefits.

As far as benefits is concerned then he will need to enquire with the relevant agencies. This particular forum is for legal advice not really general unemployment benefits advice.

I would imagine JSA will be his first port of call. Many of the benefits are means tested nowadays so if he has savings, this will effect his level of benefits. If he is being given a good redundancy pay off that would count and he may have to dip into that so use it wisely