Another redundancy

[Franco5]

Have recently been told my role is redundant and their opening offer is statutory redundancy and PILON of around £30,000 to walk away. However it sounds like there may be an opportunity to discuss a deal to avoid stringing it out and taking them through a full redundancy process.

Time served 13 years and salary £70K. What should I aim for in any discussion and has anyone got any advice on the best strategy please?

[jgrewal]

What is the sector and how much of that is statutory/notice etc?

I would get advice from https://www.acas.org.uk

[Franco5]

jgrewal said:

What is the sector and how much of that is statutory/notice etc?

I would get advice from https://www.acas.org.uk

It’s in engineering and it’s roughly 50:50.

The stat minimum offer I have is the same as if I strung a redundancy process out and hung around albeit if I accept the offer I wouldn’t work the notice period but they pretty much admit that there’s a negotiation to be had in order to have me disappear.

[CorradoTDI]

I'd expect a years salary in that situation but it very much depends on the pension situation and any other benefits / schemes you also be in.

[MustangGT]

Please remember that redundancy payments are tax free, but PILON is not. Statutory redundancy pay will depend upon your age and is based on the following for years of service:

0.5 weeks per year at under 22 years old
1.0 week per year 22-41 years old
1.5 weeks per year at 41 and over

The weekly pay rate is determined by averaging the last 12 weeks pay.

Notice period is based on years in service, the maximum is 12 weeks. Unless your contract says more.

None of this can take effect within 4 weeks because this is a negotiation period. This period can be extended if negotiations take longer.

[GT03ROB]

CorradoTDI said:

I'd expect a years salary in that situation but it very much depends on the pension situation and any other benefits / schemes you also be in.

I guess it depends on industry but I'd struggle to see many would be offering 52 weeks pay when the statutory amount in this case is around 20wks.

It may also depend on reason for redundancy: restructuring of a business will probably yield a better settlement than simply reduced workload.

[Franco5]

Reasoning is that some of the responsibilities have been outsourced.

Opening offer of statutory minimum doesn’t seem like much of a compromise agreement. I could get that stringing things through a full redundancy process. I was wondering what sort of counter I should be making?

[Muzzer79]

MustangGT said:

Please remember that redundancy payments are tax free, but PILON is not. Statutory redundancy pay will depend upon your age and is based on the following for years of service:

0.5 weeks per year at under 22 years old
1.0 week per year 22-41 years old
1.5 weeks per year at 41 and over

The weekly pay rate is determined by averaging the last 12 weeks pay.

Please also remember that statutory redundancy in the UK (with the exception of N.I) is capped at £700 per week and 20 years service.

[Muzzer79]

Franco5 said:

Reasoning is that some of the responsibilities have been outsourced.

Opening offer of statutory minimum doesn’t seem like much of a compromise agreement. I could get that stringing things through a full redundancy process. I was wondering what sort of counter I should be making?

Do you objectively think they will struggle to make you redundant?

As in, to legally justify it?

If so, there's a case to push for a compromise agreement - the amount depending on how hard you think it'll be for them to make you redundant.

If no, they have already offered you PILON........you may get another month or two's salary if they're keen for you to disappear quickly but only you really know how motivated they are for that to happen?

[paddy1970]

This is an opening negotiation - they expect you to counter their initial offer.

Based on your situation, a reasonable settlement would typically exceed the statutory minimum given your 13 years of service on a £70K salary.

Consider aiming for 3-6 months' salary as an ex-gratia payment (£17,500-£35,000) on top of your statutory entitlements.

Additional elements worth requesting include a positive reference, agreed departure announcement, outplacement support, and extended healthcare benefits.

For best results, consult an employment lawyer, calculate your precise statutory entitlement, emphasize your long service and institutional knowledge, prepare evidence of your value, and negotiate professionally without threats.

Remember that the first £30,000 of redundancy payments is typically tax-free.

[CorradoTDI]

GT03ROB said:

CorradoTDI said:

I'd expect a years salary in that situation but it very much depends on the pension situation and any other benefits / schemes you also be in.

I guess it depends on industry but I'd struggle to see many would be offering 52 weeks pay when the statutory amount in this case is around 20wks.

It may also depend on reason for redundancy: restructuring of a business will probably yield a better settlement than simply reduced workload.

This is PILON though which is taxed and saves them going through the whole process...

The other thing to consider is you're really want the payment to be made in in the next tax year or you'll lose 50% straight away.

[Jasandjules]

Franco5 said:

Have recently been told my role is redundant and their opening offer is statutory redundancy and PILON of around £30,000 to walk away. However it sounds like there may be an opportunity to discuss a deal to avoid stringing it out and taking them through a full redundancy process.

Time served 13 years and salary £70K. What should I aim for in any discussion and has anyone got any advice on the best strategy please?

How long do you think it will take to obtain another role?

Do you think it is a genuine redundancy? What is the reason given?

Is your notice 3 months?

[Franco5]

Jasandjules said:

How long do you think it will take to obtain another role? For an equivalent position if I drop lucky a couple of months otherwise who knows but I’d take a lower paid job if needed to give me something to do.

Do you think it is a genuine redundancy? Partly but it feels as though due process is not being followed. What is the reason given? Probably half the job has been outsourced.

Is your notice 3 months? Yes

Edited by Franco5 on Tuesday 4th March 17:27

[Jasandjules]

Ok so the question becomes how much do you want to push? Really you have little to lose so in your shoes I would go back and start the ball rolling - I assume they have noted a WP discussion?

[Franco5]

Jasandjules said:

Ok so the question becomes how much do you want to push? Really you have little to lose so in your shoes I would go back and start the ball rolling - I assume they have noted a WP discussion?

What is a WP discussion? The boss has said to contact him in a few days when the dust has settled.

I guess this is an invitation for voluntary redundancy with the understanding that if negotiation is unsuccessful I’ll be leaving with statutory minimum following some sort of redundancy process that will cost them time and money.

I’m happy to push for the best deal and don’t want to leave anything on the table but I’m wondering what a good counter offer from me would be? Statutory minimum plus 12 months salary, 6 months salary?

Given my age this will be the one and only opportunity in my career to get a reasonable leaving package.

Edited by Franco5 on Wednesday 5th March 16:23

[Jasandjules]

Apologies. WP is Without Prejudice... They will (should) know what that means. It is the effectively you saying you will leave now for X money and will sign a settlement agreement saying you won't sue them for anything arising out of your employment etc... Therefore you are setting out your stall as to what losses you think you would incur and asking them to pay more to you as a result....

[Franco5]

Jasandjules said:

Apologies. WP is Without Prejudice... They will (should) know what that means. It is the effectively you saying you will leave now for X money and will sign a settlement agreement saying you won't sue them for anything arising out of your employment etc... Therefore you are setting out your stall as to what losses you think you would incur and asking them to pay more to you as a result....

Do I need to factor in the loss of not being able to sue them and anything arising from that?

[Franco5]

GT03ROB said:

I guess it depends on industry but I'd struggle to see many would be offering 52 weeks pay when the statutory amount in this case is around 20wks.

It may also depend on reason for redundancy: restructuring of a business will probably yield a better settlement than simply reduced workload.

They would classify this as reduced workload I would guess.

Looking at other situations on PH there seem to be big disparities in what people receive and I’d have preferred a more reasonable opening open from them but to fulfil their statutory obligations then leave the ball in my court is entirely indicative of their thinking knowing how they operate over the years which is to say hard ball.

What’s the thoughts on a reasonable counter from me?

[Muzzer79]

Franco5 said:

GT03ROB said:

I guess it depends on industry but I'd struggle to see many would be offering 52 weeks pay when the statutory amount in this case is around 20wks.

It may also depend on reason for redundancy: restructuring of a business will probably yield a better settlement than simply reduced workload.

They would classify this as reduced workload I would guess.

Looking at other situations on PH there seem to be big disparities in what people receive and I’d have preferred a more reasonable opening open from them but to fulfil their statutory obligations then leave the ball in my court is entirely indicative of their thinking knowing how they operate over the years which is to say hard ball.

What’s the thoughts on a reasonable counter from me?

Your counter really depends on the position the company is in and what their culture is like, which only you know.

If there is (objectively) a justifiable reason for redundancy - there's little impetus for them to exit you out quicker, other than a hassle factor in dealing with your exit. This is worth something, but not an awful lot in a mid-management role. If they're confident and fairly hard-nosed, they'll just let normal redundancy process commence.

If it's a questionable redundancy and/or they want a good exit for you, there's more impetus for you to go quietly so it adds value to your package.

Keep in mind that if they were to just sack you and you successfully claimed for unfair dismissal, your maximum payout that a tribunal could order would be 12 months' salary (capped at £105k, £115k from April)

So, going for a year's salary is fairly futile unless they absolutely have no justification to exit you.

However, as posted above, you also have little to lose and your side of the negotiation can come down in the process but won't go up.

If you were me in my industry and they had a reasonable case for redundancy, I'd start at 6 months salary, plus contractual redundancy, etc.

[Franco5]

Muzzer79 said:

Your counter really depends on the position the company is in and what their culture is like, which only you know.

If there is (objectively) a justifiable reason for redundancy - there's little impetus for them to exit you out quicker, other than a hassle factor in dealing with your exit. This is worth something, but not an awful lot in a mid-management role. If they're confident and fairly hard-nosed, they'll just let normal redundancy process commence.

If it's a questionable redundancy and/or they want a good exit for you, there's more impetus for you to go quietly so it adds value to your package.

Keep in mind that if they were to just sack you and you successfully claimed for unfair dismissal, your maximum payout that a tribunal could order would be 12 months' salary (capped at £105k, £115k from April)

So, going for a year's salary is fairly futile unless they absolutely have no justification to exit you.

However, as posted above, you also have little to lose and your side of the negotiation can come down in the process but won't go up.

If you were me in my industry and they had a reasonable case for redundancy, I'd start at 6 months salary, plus contractual redundancy, etc.

Thanks. I had 6 months in mind but they will haggle me down without a shadow of doubt so I’d need to start at 7/8/9 to give myself the wriggle room.