Archive for the ‘Redundancy Payment’ Category
By Liam - Tuesday, September 29th, 2009
For a lesson in how not to get out of paying redundancy pay, click here.
The lesson from this case is if you want to avoid making a payment on termination of employment by reason of redundancy, get employees to agree to short notice in return for not being required to work their notice and make it clear to them that any payment you make is appropriated (stated to be paid in satisfaction of) redundancy pay as it is possible for employees to waive their right to notice pay, but not their right to redundancy pay. The right to receive redundancy pay can only be waived with a Compromise Agreement (or COT3).
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By Liam - Monday, August 24th, 2009
Employees who are employed on fixed term contracts can be entitled to redundancy pay. This is more often than not a theoretical problem than a practical one because many (if not most) fixed term contracts are for fewer than 2 years and such roles are more commonly filled by external candidates than internal ones. However, it is a trap to be aware of when considering giving an employee with around 2+ years’ service a fixed term contract in circumstances where you don’t expect to renew it upon its expiry.
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By Liam - Friday, August 7th, 2009
This article reports an unusual negotiation tactic for securing an enhanced redundancy payment. Will the action back fire and result in the employees concerned being dismissed for gross misconduct - bringing the company in to disrepute, causing 15 police officers to come and get them out of the office etc?
In the context of the clients I see who receive statutory redundancy pay only (1 week’s pay per year of service for people under the age of 42), it appears to me that the redundancy payments on offer were pretty generous in the first place.
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By Liam - Tuesday, July 28th, 2009
From 1 October 2009, Redundancy pay will go up from the current £350 per week to £380 per week.
Readers of our blog and attendees at our annual employment law seminar will know that a year or two ago amendments were made to authorise a one off increase to the rate of redundancy pay unrelated to the rate of inflation (as distinct from the normal annual increase in the rate of redundancy pay which kicks in every February).
This blog reported the increase to £380 here, but we now know the increase will take place on 1 October 2009 and there won’t be an annual increase in February 2010. The rate will therefore remain at £380 per week until February 2011.
This change will only benefit those who are paid more than £18.2k per year and even after the change those earning £19,760.00 per year will still only receive redundancy pay based on a capped week’s pay rather than a real week’s pay.
Posted in Categories, Redundancy Payment | 3 comments »
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By Sarah - Friday, July 10th, 2009
A famous landmark in Peterborough has been in the news a lot lately as it stands in the way of the redevelopment of the station area. However, today the Great Northern Hotel is in the news for a diferent reason. It has been closed for a number of weeks for a refurbishment. Yesterday, employees received through the post a letter of dismissal by reason of redundancy.
This may seem like a claim but the letter went on to say that the Company who run the hotel had gone into administration and all employees would be made redundant. Some employees have been there for over 20 years! Indeed our own Linda Harris started her career in reception there no doubt with the same friendly and unique way she does here.
All employees who are in this situation can make a claim from the Government for:
- redundancy payment (statutory)
- notice pay (based on statutory notice)
- unpaid wages (up to a maximum of 8 weeks money)
- Holiday pay (based on holiday in the 12 months prior to insolvency up to a maximum of 6 weeks)
All payments are capped per week in line with the statutory cap which is currently £350.00 per week. Employees must claim on a form called RP1and you can get more guidance from the Insolvency service.
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By Sarah - Monday, July 6th, 2009
The CBI has made a recommendation to the Government as an alternative to redundancy to try and tackle spiralling unemployment in the UK. The recommendation is that employers either use the redundancy route or an “alternative to redundancy” ATR route. The employer could place the employee on ATR for a period of up to 6 months as an alternative to redundancy.
The employee would not be required to work during that period and would get an ATR allowance. The allowance would be made up of Job Seeker’s allowance plus another equivalent amount paid by the employer on a weekly basis. If the employer chooses, he can take the employee back at the end of the set period or when the business picks up. If the employer chooses not to then redundancy rights are preserved and the employee would have up to six months additional service.
If redundancy still takes place it will cost the business more but the employee receives more than the state benefit and the possibility of their job back. Will there be a take up I’m not sure…
Posted in Redundancy, Redundancy Payment | 3 comments »
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By Philip - Friday, May 1st, 2009
I know that some of our readers are, voluntarily or involuntarily, “between jobs.” If you are between jobs, sometimes a change in career or setting up a lifestyle business can seem an enticing option. For those made redundant I wonder if your outplacement counsellors have come up with these possible career paths.
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By Emma - Thursday, April 23rd, 2009
Just to follow on from Phil’s blog yesterday and in response to enquiries we have been receiving today… Alistair Darling did announce a rise in the weekly rate from £350 to £380 for statutory redundancy payments in the budget yesterday. However, he did not announce from when it will take effect or whether the increase will also apply to unfair dismissal compensation payments. As soon as we know we’ll let you know.
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By Philip - Wednesday, April 22nd, 2009
One I missed. Tucked away in the small print is the following:
To help provide adequate support for individuals who have been made redundant the
Government announces a one-off increase in the level of statutory redundancy pay, making
the weekly rate £380. The Government is also considering whether to introduce a new ‘floor’
which would set a minimum level for statutory redundancy payment rates
The £380 figure looks like it will come into effect before the normal uplift time in February but we will keep you posted.
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By Sarah - Friday, March 13th, 2009
The proposed increase to the statutory redundancy payment will spell more doom and gloom for the economy. The Statutory Redundancy Payment (Amendment) Bill is a private members bill which will get its second reading today in Parliament. The Bill proposes to increase the statutory redundancy payment to £500 which is an increase on the current £350 by 43%!
Understandably, business groups are saying that this would have a devastating impact on small businesses and may force them to close rather than encourage them to retain staff. The MP bringing the Bill, Lindsay Hoyle, says that the current rate is so out of step with average earnings that it is causing particularly hard times.
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