Partner "At Risk" of Redundancy... Few Q's

Hi All,

I have just come across this site and had a browse around, very useful indeed given the current economic climate!

My partner has today been put at risk of redundancy. There has been discussions since late last year and to say they have dragged their back ends about it all is an understatement.

There was an announcement last Monday (16 Feb) notifying employees of a potential redundancy situation, and that volunteers would be welcomed (deadline 20 Feb). Since then, he has not been spoken to nor received any further information regarding the situation until today. A copy of the briefing was not placed on notice boards or copies given to employees, is this a legal requirement, I would have thought that "duty of care" would have kicked in and they should have at least posted it notice boards for employees to read freely?? Anyone any comments on this?

He was called in to an office where a Manager and a Supervisor where present, handed a pile of paperwork, consisting of redundancy calculation, notice payments etc, score sheets (which makes no sense at all) and two letters, both dated today, one advising the situation and the other informing him to remain at home during the consultation period.

He has a few questions:

Should he have been formally invited to todays meeting and offered the right to be accompanied?

Does a HR representative have to be present at all formal meetings?

Is notice pay TAXABLE? Directgov states "If you work your notice, you'll be taxed at the usual rate on the money you earn in your notice period. PILON is only taxable if it's been provided for in your contract or is customary. Otherwise, it is not taxable unless the PILON together with redundancy and other compensation adds up to more than £30,000, in which case the excess over £30,000 is taxable at the usual rate.". Am I right in saying that as it does not provide for a PILON payment in his contract it will in fact be on taxable?

Outstanding loans to the company, are these waivered upon termination, or does the Company have the right to deduct them fromany monies owing?

Sorry to start of with such a long note, but he is due to attend a meeting on Wed at 11am and wants to go prepared.

Any advice would be much appreciated.

Thanks
Zephyr

Hi

Thanks for your question.

Can you tell me how redundancies the your partner's employer is proposing to make?

Hi,

Thanks, I believe it is only up to 4 employees.

I understand there is no set consultation period but surely, issuing a letter Monday, inviting him to attend a meeting tomorrow and then dismissing by Friday doesnt show much consideration for the employees who are at risk??

Zephyr

Thank you for your reply.

A pay in lieu of notice payment is tax-free where the payment is for a breach of contract. Where a PILON is contractual, it is subject to tax. So, if you husband has a term in his contract which says "x is entitled to X no. of weeks notice or pay in lieu of notice", then this payment is taxable. If there is no clause in the contract which enables his employer to make a PILON, then this will not be taxed.

With regards to the period of time for consultation to dismissal, as there is not a collective redundancy situation, there is no law which sets out how long the process should last. Nevertheless, consultation has to be meaningful.

Consultation must be fair and should involve giving the employees at risk, a full and proper opportunity to understand the matters about which they are being consulted and to express their views on those subjects. Furthermore, the employer should be considering alternative employment. Consultation should also commence before the company has made a decision as to whether redundancies should take place.

In any redundancy situation, companies should be communicating with all of the workforce giving all the workforce a full explanation of the situation and explain the policies and practices adopted to those made redundant. A negative organisational culture can often breed where management communication is minimal. Although, please note this is best practice that employers should adopt. Unfortunately there is no legal requirement for employers to give briefing, newsletters etc. Where there is a collective redundancy situation, there are more legal requirements for consultation but unfortuantely your husband's redundancy doesn't fall into this category.

I hope this information has helped. Please feel free to return for further advice or to keep us up-to-date with developments.

Thanks for that advice. Very useful re: the PILON payment info as it stipulates that this payment is subject to usual Tax and NI deductions through the payroll.

Another question that has popped up is, where it states his notice pay, they have said that the notice pay is based on a weeks average pay? Is this right? He used to get a shift allowance prior to them reducing from 4 shifts to 1 and now only gets a standard annual salary (I suppose in all if they have taken it over a 12 month period as stipulated it will be to his benefit).

It just seems like they have rushed this whole process and not considered the employees at all and they have used the union as a representative, whom my partner is not a member of and hs been disregarded in any of the meetings they have had.

I will keep you updated onhis progress, not looking good, but thats the way the world is turning at the moment and I wish some employers would deal with these kind of situations a lot more sensitively.

Zephyr