Redundancy whilst pregnant.

[Tuscanless Ali]

Daughter will find out on Friday if she is going to be made redundant (Looks likely.) she will be 25 weeks pregnant and HR have said they will pay all of her SMP in one lump sum. Thing is, if she is paid in that way she will pay a lot in PAYE (Which she can claim back.) and NI (Which she cannot.)

Can she insist that she doesn't want to be paid in a lump sum but get it in the usual monthly way?

[Rich_W]

Aren't they doing her a favour my giving her the SMP anyway?

[Silver]

Is SMP classed the same way as normal pay for tax purposes? I always thought that redundancy payments were tax-free but I admit I'm not particularly up on this. Genuinely curious though.

[Deva Link]

I don't think she'll pay a lot of NI because she'll hit the Upper Earnings Limit in one go.

In fact this used to be an NI avoidance trick for directors to pay themselves in lumps.

[davepoth]

Get a "compromise agreement" in place for the value of the SMP. You don't pay any tax on a compromise agreement settlement, and since it won't cost the company any more than paying her, I doubt they'll be too fussed.

[LC23]

They are making her redundant while she is pregnant - very brave of them. I would advise her to speak to a good employment lawyer.

[edc]

davepoth said:

Get a "compromise agreement" in place for the value of the SMP. You don't pay any tax on a compromise agreement settlement, and since it won't cost the company any more than paying her, I doubt they'll be too fussed.

Why would the company want to pay extra solicitor fees on top of the SMP?

[Slagathore]

LC23 said:

They are making her redundant while she is pregnant - very brave of them. I would advise her to speak to a good employment lawyer.

I'm not trying to be argumentative, but can I ask why? Surely the fact she is pregnant is irrelavent. If they were using her pregnancy as the reason, then I can understand how that could cause problems, but it doesn't sound like they are.

Do pregnant women get more rights when it comes to sacking/redundancy?

By the sounds of it, she has accepted that she's being made redundant, it's just details of some of the payment that she isn't too happy with.

[edc]

LC23 said:

They are making her redundant while she is pregnant - very brave of them. I would advise her to speak to a good employment lawyer.

Unfortunately I have had to run redundancy rounds and had to make redundant 3 people who were on mat leave (rather than pregnant). If the selection criteria is fair and the process tight then there is no problem.

As for the OP she can insist on anything she wants but the company don't have to do it. He redundancy date is the date and if that is the termination date then employment ends there. The only other way to do it, which most companies won't entertain, is to extend the redundancy date to the end of the mat leave. The company will then have to continue looking at redeployment and may be compelled to move the mat leaver to another role automatically. Obviously the company avoids all this with an earlier leave date.

[LC23]

Slagathore said:

I'm not trying to be argumentative, but can I ask why? Surely the fact she is pregnant is irrelavent. If they were using her pregnancy as the reason, then I can understand how that could cause problems, but it doesn't sound like they are.

Do pregnant women get more rights when it comes to sacking/redundancy?

By the sounds of it, she has accepted that she's being made redundant, it's just details of some of the payment that she isn't too happy with.

Because despite the real reason for redundancy most companies would want to run a mile from the potential "they are getting rid of me because I am pregnant" threat and any negative publicity that may come from this. Of course some companies just won't care. Depends how far the soon to be ex employee wants to push it.

[Slagathore]

LC23 said:

Because despite the real reason for redundancy most companies would want to run a mile from the potential "they are getting rid of me because I am pregnant" threat and any negative publicity that may come from this. Of course some companies just won't care. Depends how far the soon to be ex employee wants to push it.

Ahh, yeah, I can imagine it could open a minefield if the person being made redundant decided to challenge it.

[Tuscanless Ali]

Thanks for the replies.

I'm not 100% sure how it works, but have understood that if she is being made redundant they will be giving her four weeks notice in which case she will be 29 weeks pregnant and therefore fully entitled to her maternity pay (So no, not doing her a favour.)

She's not that fussed about being made redundant as it is highly unlikely that she will be returning to work after her second child. There is her (2 days a week) and another girl that does 3 days a week, so they did think that maybe they could have job - shared one of the full time roles.

Her paying an extra 350 quid in NI is a lot of money for her at the moment and she was just hoping she could insist on being paid monthly until the end of her maternity leave. If she can't then there is nothing she can do about it I suppose.

[GarryA]

Tuscanless Ali said:

Thanks for the replies.

I'm not 100% sure how it works, but have understood that if she is being made redundant they will be giving her four weeks notice in which case she will be 29 weeks pregnant and therefore fully entitled to her maternity pay (So no, not doing her a favour.)

She's not that fussed about being made redundant as it is highly unlikely that she will be returning to work after her second child. There is her (2 days a week) and another girl that does 3 days a week, so they did think that maybe they could have job - shared one of the full time roles.

Her paying an extra 350 quid in NI is a lot of money for her at the moment and she was just hoping she could insist on being paid monthly until the end of her maternity leave. If she can't then there is nothing she can do about it I suppose.

[Tuscanless Ali]

GarryA said:

Why the rolleyes? She only works two days a week, and it would cost more in childcare than she would earn.

[GeraldSmith]

Slagathore said:

Do pregnant women get more rights when it comes to sacking/redundancy?

Yes they do. They have a right to be offered any suitable alternative job that may exist and they take precedence over other candidates. In other words if there is another job they can do they have to be offered it even if they are not the best candidate for it.

Making women who are pregnant or on maternity leave redundant is possible, if, for example, the place they work is closing down then they are no different to everyone else. But if it is just some roles that are going then it is something that has to be done very carefully, pregnancy/maternity is the most protected state in employment law.

Of course if she doesn't mind being made redundant it's not that relevant.

[Silver940]

This happened to my Wife when pregnant with number 2. There are some rules around it where if she is less that 15weeks until the baby is due then the firm is liable for the SMP. My wife also got it paid as a lump sum with the other redundancy money.

At the time they told her she was being made redundant they weren't aware they were liable for the SMP - they were not best pleased, less so when she told the other pregnant girl in the office who qualified by a few days.

[GeraldSmith]

Tuscanless Ali said:

Daughter will find out on Friday if she is going to be made redundant (Looks likely.) she will be 25 weeks pregnant and HR have said they will pay all of her SMP in one lump sum. Thing is, if she is paid in that way she will pay a lot in PAYE (Which she can claim back.) and NI (Which she cannot.)

Can she insist that she doesn't want to be paid in a lump sum but get it in the usual monthly way?

She can ask but if they want to pay it in one lump I think they can.

Deva Link said:

I don't think she'll pay a lot of NI because she'll hit the Upper Earnings Limit in one go.

Exactly, paying in one lump shouldn't disadvantage her even on NI

Silver said:

Is SMP classed the same way as normal pay for tax purposes? I always thought that redundancy payments were tax-free but I admit I'm not particularly up on this. Genuinely curious though.

Compensation for loss of office is tax free up to £30k but this isn't that, it's classed as earnings so is taxable.

davepoth said:

Get a "compromise agreement" in place for the value of the SMP. You don't pay any tax on a compromise agreement settlement, and since it won't cost the company any more than paying her, I doubt they'll be too fussed.

A common misconception, you don't pay tax on any compensation for loss of office regardless of whether there is a compromise agreement. But payments made on leaving may include things that the ex-employee is contractually entitled to such as notice pay, unpaid holidays, unpaid salary and SMP and those are taxable. Since she is entitled to SMP the employer can't just pay her it under another name because that would open them up to her coming back and having the SMP as well.

[AyBee]

Tuscanless Ali said:

GarryA said:

Why the rolleyes? She only works two days a week, and it would cost more in childcare than she would earn.

I imagine because companies complain about having to employ women of a certain age due to the likelihood of them taking time off for children and deliberately taking payment by way of maternity leave/redundancy with no intention of going back is a bit of a piss-take.

I can understand why she's doing it but it doesn't make it right...

[Tuscanless Ali]

AyBee said:

I imagine because companies complain about having to employ women of a certain age due to the likelihood of them taking time off for children and deliberately taking payment by way of maternity leave/redundancy with no intention of going back is a bit of a piss-take.

I can understand why she's doing it but it doesn't make it right...

Well she hasn't hidden the fact that she was unlikely to return, she was Tupe'd over in April and since then has had hardly anything to do. She has already decided to either work from home by setting up a payroll bureau, or working evenings somewhere.

The company will be re-imbursed for the payment too. (Well 92% of it in this case.)

[GeraldSmith]

AyBee said:

I imagine because companies complain about having to employ women of a certain age due to the likelihood of them taking time off for children and deliberately taking payment by way of maternity leave/redundancy with no intention of going back is a bit of a piss-take.

I can understand why she's doing it but it doesn't make it right...

From an employers perspective the money isn't the issue, SMP is largely reclaimable from HMRC so it doesn't cost the company a lot. The problem is the requirement to keep the job open and the difficulty in providing cover for a longish period of time.