Capped Redundancy

[Stephen57]

My employer is offering redundancy at 1.5 weeks times years of service. They are also paying 3 months salary in lieu of notice. However, they are capping this amount at 1 year's salary but including both the amount from the redundancy equation AND the PILON in the capped amount. As someone with 30 years service this is impacting me by several thousand pounds.
Is the company's approach legal or are redundancy and PILON two separate concepts and should be paid independently? Thanks

[ULA]

Re: Capped Redundancy

Sorry to hear that you facing redundancy. I am assuming that your employer is only offer the statutory redundancy payments which is based on an employee’s age and length of employment and are counted back from the date of dismissal as follows:

• 1.5 weeks’ pay for each year of employment after their 41st birthday
• a week’s pay for each year of employment after their 22nd birthday
• half a week’s pay for each year of employment up to their 22nd birthday

Length of service is capped at 20 years and weekly pay is capped at £489. The maximum amount of statutory redundancy pay is £14,670.

It is up to the employer as to whether they require an employee to work their notice period and then receive there redundancy payment on termination or under the circumstances take the view not to ask them to work and pay them in lieu of their notice. This should be treated separately from any redundancy payment.

[Stephen57]

Re: Capped Redundancy

Thanks Ula. The redundancy is an enhanced redundancy package. Does that affect your comment that 'This should be treated separately from any redundancy payment'? Can i ask on what basis you are stating that this should be the case ie is it 'good practice' or a legal requirement? Thanks

[ULA]

Re: Capped Redundancy

Employers are entitled to cap the amount of enhanced redundancy pay awarded to its employees, so the cap amount is related to the redundancy payment only.

Pay in lieu of notice is where your employer does not require you to work out your actual contractual or statutory notice period and effectively you are being given a payment instead of working your notice. This in effect means that your contract has ended without you receiving any notice. This is separate from your redundancy payment.

Are the enhanced terms part of a negotiated agreement, contractual or based on previous custom and practice?