Losing Your Job? Learn Your Redundancy Rights11th Jun 2018
Up to 6,000 jobs are under threat after House of Fraser announced that it is to close 31 stores – including its Oxford Street, London flagship and the former Dingles in Old Christchurch Road, Bournemouth.
So what can employees facing redundancy do? Very little, you might think – but this is not always the case.
Your employer has the legal right to make you redundant if your job ceases to exist or your place of work is closing.
However, even if your employer has grounds for redundancy, they will still have to act fairly and follow a reasonable procedure.
Facing Redundancy? Get Legal Advice
Make sure your employer is acting correctly. Don’t assume you have to do whatever your employer says simply because they’re in financial trouble and have no choice.
Get proper advice from an experienced employment solicitor – we can advise you on your redundancy rights and how to get the best payout available in your circumstances.
Think hard about the following important issues and how they will affect your redundancy payout…
Has Your Employer Offered You Another Job?
Your employer may offer you an alternative to redundancy – such as another job at another store, branch or place of work.
This could be a good result for both parties if they both agreed but if you refused the job then you could be effectively resigning…so the employer would not owe you a redundancy payout.
The law says that any alternative role that your employer offers you must be suitable and reasonable.
But what is ‘suitable’ and ‘reasonable’?
The new role will normally be in a different place of work. If this is local to you then it may be suitable and reasonable. If the new role is further away then it could be unsuitable and unreasonable.
It would not be suitable and reasonable to require an employee to move hundreds of miles to the new place of work (unless the employee agreed).
The new position should also be at the same level and within your skills to perform. Normally this would also be at the same pay rate unless you agreed otherwise.
Has Your Employer Offered You A Settlement Agreement?
Even though your employer may be well within their rights to make you redundant, many play safe by offering a settlement agreement for you to sign.
This is a legally binding agreement between you and your employer. Under this agreement you waive your employment rights. You must have independent legal advice before the agreement is binding on you and you do not have to use legal advisers recommended by your employer.
Be very careful before you sign any settlement agreement as you will commonly be asked to waive important rights in addition to settling your redundancy payment.
Typically you will be offered more than your statutory redundancy pay to enter a settlement agreement but the employer could try to pressurise you. They may say that you won’t get the enhanced redundancy payout if you refuse to sign.
So get legal advice before signing. Your employer may contribute towards your legal costs (our fees are very competitive).
We reply promptly and can generally make an appointment for you to see an employment solicitor within 24 hours of you first contacting us.
Is Your Redundancy Payout Liable For Tax?
When (and how) you were made redundant will determine whether you owe any tax on your redundancy payout. The law on this changed on April 6 2018.
The change concerns any Payment In Lieu Of Notice (PILON) – such as when an employer makes you redundant without giving you sufficient notice (as agreed within your contract).
Before April 6 2018, any payment triggered by a PILON clause in a contract was subject to tax and National Insurance. If there were no clause in the contract then any PILON could be treated as tax-free up to £30,000.
But since April 6 2018 all PILONs are now taxable, regardless of whether they are contractual or non-contractual.
Get Expert Legal Advice On Redundancy
Anxious about impending redundancy? Get legal advice as soon as possible.