Oh great and mighty STW hive mind!

As you may be aware, I am currently unemployed and awaiting for statutory redundancy. When we were given our RP1 forms to fill in, we were also given a sheet with our estimated entitlements, which included arrears of pay, holiday pay, compensation for loss of notice and redundancy pay. All in all, it came to about 18 weeks of pay for me.

However, I’ve been told today by an employment lawyer that the DWP caps statutory redundancy payouts to 8 weeks in total. Does anybody if this the case? I want to get more information from a wider range of sources (the lawyer may have an agenda, although I can’t believe they’d lie) – sadly the Citizen’s Advice Bureau closes early on a Friday, so if anybody who has been through it can confirm or deny, that’d be grand.

IANAL but statutory redundancy is the legal minimum you can receive, anything over that is down to the company IIRC.

Happy to told I’m wrong though.

linky

govt has a calculator here

If your company wants to pay you more than Statutory Minimum then they can (mine did). If they don’t, they have to pay you Statutory Minimum (as my Dads did).

Fingers crossed you get your 18 weeks.

Yeah, I looked at the calculator, but that just has redundancy – it doesn’t take into account compensation for loss of notice, holiday pay or arrears of pay. Everything I’ve looked at suggests that the total isn’t capped, but the lawyer says that it is. :/

arrears of pay, holiday pay, compensation for loss of notice

This is additional to statutory redundancy pay

You need a better lawyer

When I worked with this stuff regularly, the ‘cap’ related to how much you could get tax free. It used to be £30,000 I don’t know what it is now.

Regardless of the total amount being paid, some elements of your settlement will not be counted as ‘redundancy’ and therefore will be subject to tax at the normal rate. This includes any payment for holiday arrears, compensation for notice period or commission etc.

You will still get everything that your company pays you. You just won’t get it all tax free.

On a separate note, good luck. Been there, done it, got the stress lines. Hope you’re in a good place and you find work again soon.

3. Redundancy pay

You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:
half a week’s pay for each full year you were under 22
1 week’s pay for each full year you were 22 or older, but under 41
1 and half week’s pay for each full year you were 41 or older

if the comapny has gone bust thats all youll get sadly

Regardless of the total amount being paid, some elements of your settlement will not be counted as ‘redundancy’ and therefore will be subject to tax at the normal rate. This includes any payment for holiday arrears, compensation for notice period or commission etc.

Almost – check the wording on the “compensation” one – IME it’s more common to get “compensation for loss of office” – in which case you can get that tax free (pay in lieu of notice is taxable).

Arrears and holiday pay should be paid in full but will be taxed. Redundancy is 1 week pay per full year capped at £450 per week and 20 weeks. Compensation is up for negotiation to stop you kicking up a fuss and costing them time and money. That’s all aiui and ianal 🙂

@ project, maximum per week is capped at £430 also 🙁

Apologies, raised to £450 this year.

This includes any payment for holiday arrears, compensation for notice period or commission etc.

Not strictly – if the payment in lieu of notice (“PILON”) is not automatic (an “Auto-PILON”) – that is there is no contractual or policy agreement that it will be paid, then it is tax free as well. It is common for PILON’s in redundancy agreements to be written in ambiguous terms nowadays in order to ensure maximum redundancy payments to employees.

You need a better lawyer

She’s not actually my lawyer – long story (which I probably shouldn’t put on a public forum). Just really alarmed because I was expecting one figure, and I’ve been told it’ll be another.

Almost – check the wording on the “compensation” one – IME it’s more common to get “compensation for loss of office” – in which case you can get that tax free (pay in lieu of notice is taxable).

Ours is ‘compensation for loss of notice’ – which will have Jobseeker’s Allowance, tax and any earnings from any new job (one can hope..) deducted.

The company went into liquidation, so no contractual redundancy, sadly.

On the notice period thing, if you had say a 3 month notice period and you get made redundant, do you get 3 month’s pay taxed as normal plus statuatory redundancy pay, or does the redundancy aspect overide everything and you only get the statuatory entitlement?

On the notice period thing, if you had say a 3 month notice period and you get made redundant, do you get 3 month’s pay taxed as normal

That’s how it used to work yes on the basis that the notice period is time you would have worked.

The company went into liquidation

Apologies, didn’t know that bit, my previous advice may be complete bobbins and the lawyer is right – if your former employer has gone belly up and the state is picking up the tab, project has it right I believe.

On the notice period thing,

They are 2 separate things – one to compensate for loss of the job, and one for the lack of notice period.

http://www.usdaw.org.uk/adviceresources/workersrights/knowyourrights/redundancy/holidaypay.aspx

oh and best wishes on getting another job, Mrs Toast

Bummer. I was in that position in my first ‘real’ job; I think I got one salary cheque, company went phutt before the second arrived. Ouch, took ages to get anything beyond the statutory minimum – even then it was pretty minimal once the company had been liquidated..

Also, best wishes for getting new employment quickly.

Read here details of governement scheme

Sorry to hijack but I’m going to be made redundant in a few weeks time, I don’t yet know if I’m going to have to work the 3 months notice or whether I’ll get payment in lieu. If it’s in lieu can I claim JSA straight away or do I have to wait until after the 3 months is up? It’s not the JSA I’m interested in but it is the qualification for my mortgage protection should I fail to find another job in time.

Just come off the phone from talking to the Insolvency Service, they were really helpful. The chap told me that the lawyer was talking nonsense – for a start, the DWP have nothing to do with Statutory redundancy, the Insolvency Service are a different department. :s

Best wishes for getting another job. I’ve been made redundant, twice, it was awful at the time but, looking back, things turned out well.

there is a governmnet office for redundancy seperate from the DWP and the insolvecy service.

As the company has gone bust it has no money to spend on redundancy, so the cost is past to the office of redundancy.

Maximum years working for same employer you can claim for is 20 years, and a maximum of 450 per full year worked.

If it’s in lieu can I claim JSA straight away or do I have to wait until after the 3 months is up?

I was made redundant a couple of weeks ago and signed on straight away. Has your employer given you the opportunity to walk away and take the money in lieu of three months notice? If so and you take that option not a problem, sign on for JSA; you’ll be eligible as soon as you work your last day.

The job centre plus people will want to see proof of your redundancy (normally in the form of a letter from your employer confirming you will lose your job) to keep them happy.

I was quite surprised, I’ve received a decent pay out and as a result have some cash in the back but I still qualify for JSA. I was expecting nowt. The Daily Fail now undoubtedly hates me 🙂

@cheers_drive

It depends what the payment is for – if they are keeping you on payroll but you are on “gardening leave” for your notice period then no, if they are terminating your employment with immediate effect and paying you in lieu of notice then you are, as of that date, unemployed.

Probably the latter, in my experience.

Project, what you speak of is part of the insolvency service these days and it is this that Mrs toast is I think referring to. It is also widely known as the redundancy payments Office or redundancy payments service.

The company went into liquidation, so no contractual redundancy, sadly.

It’d been handy if you’d mentioned this at the start…

If I remember it’s weeks * salary (to a maximum per week). But no idea how it is made up.

Have a read here
http://www.moneysavingexpert.com/family/redundancy-help

If the company has no money left, then you’ll need to claim Statutory Redundancy Pay (SRP) which is organised via the insolvency practitioner dealing with your employer’s administration.

The money you get will come from the National Insurance Fund, a giant government insurance scheme set up after World War II into which we all pay as we work. Once that’s done, this fund will try to reclaim the cash from the company’s assets.

It’s not just redundancy pay

If you’re owed wages or holiday pay from a firm that’s gone bust, you can also claim the following from the National Insurance Fund via the insolvency practitioner. Unlike redundancy pay, this is taxed and uses the same ‘maximum’ rule of no more than £450 a week.

Wages. Up to eight weeks’ unpaid wages can be claimed.
Holiday pay. Up to six weeks’ unpaid wages can be claimed.
Compensatory notice pay. One week’s pay after one calendar month’s service, and then one week’s pay per year of service up to a maximum of twelve weeks.
Any further holiday pay and wages owed will be billed as ‘preferential debt’. This means they’ll be paid before other debts if – and only if – there’s enough money when the eventual assets of your employer are totted up and divided out.

How to claim

To apply for Statutory Redundancy Pay, you’ll need to contact an Insolvency Practitioner or call 0845 015 0010 to request a copy of a RP1 form (see the Insolvency Service website for more details) and send it back to the practitioner dealing with your company’s insolvency. It usually takes about three to six weeks for you to receive your payment.

If you’ve doubts about the way your employer may have calculated your statutory redundancy pay call the Redundancy Payments Helpline on 0845 1450 004.

This info differs from what you have said or how you have interpreted your lawyer.
I interpret this that you can claim for the whole amount of your statutory redundancy pay as well as :-
Wages. Up to eight weeks’ unpaid wages can be claimed.
Holiday pay. Up to six weeks’ unpaid wages can be claimed.
Compensatory notice pay. One week’s pay after one calendar month’s service, and then one week’s pay per year of service up to a maximum of twelve weeks.

I’m not sure id use this info or this forum as your only source of info though
fwiw ive dealt with a few redundancy but none where gone bust so was interested..

Yeah, the lawyer apologised and said that she had used a ‘poor choice of phrasing’ (which is funny, because she used the same poor choice to another former colleague who came out of a conversation with her with exactly the same impression).

Anyway, I’m off to the CAB on Monday, as apparently things have taken an ‘interesting’ turn.