Faced with voluntary redundancy - Notice Period

[extrobe]

Hi, we've all been offered voluntary redundancy, ahead of 'proper' redundancies later in the year.

 

It's a big firm, so a vanilla online 'calculator' has been setup for us to get a quote on the package.

 

However, I have a concern around the notice period in lieu being offered. Rather than it being per my contract, they look to be basing it on length of service. (But clearly calling it Notice payment, not Stat pay or Additional Service Pay). So I'm being offered 9 weeks, rather than the 13 in my contract.

 

Some who I've spoken to has suggested that with VR, it's all based on mutual agreement, so if I agree to 9 weeks, that's what I get. But reviewing CAB's website suggests that VR is still a form of dismissal, and so surely notice should be per my contract?

 

Does anyone have any knowledge on this? And, if I 'accepted' 9 weeks, could I later point out that my contract was different and force them to pay the remainder, or am I out of luck by then?

 

Been full-time permanently employed for over 7 years, and there is no specific PILON term in there.

 

*Actually, there is a further clause in my contract suggesting I get an additional 1 week notice per year worked, which would bring it to 20 weeks. I imagine this was an error, but is there on paper signed by both parties - but would want to understand the broader legal position before I challenge / raise that point!

[ericsbrother]

The one week per year would apply to the statutory minimum notice period so 7 years service would mean 8 weeks notice.

As it is voluntary redundancy you can negotiate but dont forget, what you are negotiating is either a longer notice period as per your contract or pay in lieu of notice as part of a package and not in isolation. If they want an answer by a set date with people to leave say 4 weeks after that date then make sure that what you agree starts at a point in the process otherwise they may just run the clock down and say that notice has been given by the offer.

Generally, if they have to pay you a month's salary more than they absolutely need to that is acceptable. Beyond that they start to threaten statutory redundancy which will leave you worse off but they can then be dragged into an ET

[extrobe]

Thank you for replying ericsbrother - though whilst I understand what you've said, I'm not entirely sure I'm any clearer.

 

As it stands, we've been given our 'quote' in three parts: - I've used an arbitrary salary of 52k to demonstrate - and I'd made an error in my start date, so updated that.

Stat Redundancy Pay: 3,712

Additional Service Payment = 10 weeks pay = 10,000

Notice Payment (wording = 'This is a payment equivalent to what you would have received, had you worked for the duration of your contractual notice.') = 8 weeks pay = 8,000

 

Where I'm concerned though, is my notice pay is only giving me 8 weeks pay, even though my contract states 13 weeks - whilst stat redundancy pay is largely fixed, and additional service pay is 'negotiable' (though in reality its not), is there not a requirement that the pay I receive in lieu of notice be equal to my actual contract, as per their own wording? Or with VR is it a case of 'take it or leave it'?

 

In terms of dates - we've been given until the end of Feb to apply - we'll then be informed between 7th March and 3rd April if it has been accepted, with a final work date of 13th April - so I don't think that being asked to apply can constitute towards the notice period, right?

[becky2585]

A voluntary redundancy situation is technically a termination by mutual consent so any notice provision may be varied (and reduced if a settlement agreement is signed).

 

The correct notice will be somewhere between the notice you have to give them to leave, or the notice they have to give you to terminate your employment.

[extrobe]

ok, thanks becky2585, I think I understand now - there's no requirement for them to pay my full notice pay if we 'agree' not to.

 

Worryingly, they state that what is being offered is exactly the same as will be offered for full redundancy, which sounds wrong, as surely in that case you would be entitled to full notice pay?

[ericsbrother]

Usually you get x weeks pay per year of service and payment in lieu of notice period so using you figures they are paying you more than a week per full year of service and less for notice period. Now, as said the notice period may be different for you leaving and them letting you go.

When I worked for a large organisation the notice I had to give was one month if I just left but should I move to a similar organisation then that increased to 6 months to stop the poaching of staff. Some of my superiors were on a 1 year notice period for the same reason. Voluntary Redundancy notice was calculated using 1 week per year of service up to a maximum of 8 weeks so it was not the same but the scheme was more generous in the severance pay itself.

I would be asking for the extra pay in lieu of notice and point out if they rebuff you that recalculating the payment per year of service means that it is just an extra £1k on the £52k salary illustration. I suspect that they are massaging their figures to avoid paying NI contributions on the actual pay aspect by increasing the severance part of the package and decreasing the PILON. If this is true then an extra £1k is really costing them nothing done that way..

[becky2585]

ok, thanks becky2585, I think I understand now - there's no requirement for them to pay my full notice pay if we 'agree' not to.

 

Worryingly, they state that what is being offered is exactly the same as will be offered for full redundancy, which sounds wrong, as surely in that case you would be entitled to full notice pay?

 

In that situation, the redundancy would be compulsory (ie would be a dismissal) so the notice provisions would be different - either one week per year of service, or the contractual notice period, whichever the greater.

 

A voluntary redundancy situation is the employee offering to leave on agreed terms, and the employer accepting that offer - if the offer was rejected by either party, there's no guarantee a compulsory redundancy situation would arise.

 

A prime example is on statutory notice in the absence of a contract for an employee with 12 years service or more - the employee is required, regardless of length of service, to give one weeks notice to terminate their employment, but the employer would have to give 12 weeks, so that would be the basic starting positions of the parties in a negotiation.

[extrobe]

ok, so in the end it was confirmed that it should be in line with my contracted notice period - it just so happens that some departments have a higher notice period than most, hence why it was showing too low.

 

I do have another question though... Does my 'years worked' anniversary anniversary take into account my notice period?

 

Ie, I'm being paid my notice period - which if I took that time into account takes me into an additional year of service. Is this taken into account with Stat redundancy pay, or is it from the date you stop going to work / are paid your final pay?

 

thank you!

[ericsbrother]

It will be when your employemnt terminates so PILON will cover the time and you gain the extra year's service. This means that effectively you are on gardening leave unless it is clear that the money is severance pay and then it isnt as everything will be bundled together and paid tax free (mostly).

[becky2585]

ok, so in the end it was confirmed that it should be in line with my contracted notice period - it just so happens that some departments have a higher notice period than most, hence why it was showing too low.

 

I do have another question though... Does my 'years worked' anniversary anniversary take into account my notice period?

 

Ie, I'm being paid my notice period - which if I took that time into account takes me into an additional year of service. Is this taken into account with Stat redundancy pay, or is it from the date you stop going to work / are paid your final pay?

 

thank you!

 

It depends - if you are paid in lieu, then it won't tick you over into a "new year". If you work your notice, or spend it on garden leave, it would.

 

(This is different to calculating continuous service for unfair dismissal rights, in which case statutory notice is automatically added on.)

[extrobe]

Thanks both - I won't push it too hard then

[Atlas01]

One thing many people never check when looking at a negotiated VR is what date their pension years runs at -

 

the easy way to describe as pensions arn't my bag is i had a few disgruntled VER leavers back on my case when they found if they had left a few weeks later their pension would have accrued another years service which could be worth quite a bit. This may be related to civil service type pensions only but i would check if i was you with your pension provider if you have one.