Notice Period

[russ turner]

Hi

After some advice from those that know

I'm currently 3 weeks into a 3 month notice period having resigned from my current position on May 31. My existing employer put me on garden leave and have advised me today that they're going to terminate my contract / end my garden leave at the end of June - 2 months early

I can start my new position on July 2 without any problem but where do I stand regarding the 2 months - am I entitled to the remaining 2 months salary from my current employer and if I am, under what rules and regs ?

Russ

[MagicalTrevor]

The 3 month notice period works both ways. You were willing to see out your 3 month notice period and they are happy to let you go 2 months early. Contractually they'll pay you the 2 months and once you're free from that obligation then there is nothing stopping you taking the new job.

Sounds like a good result to me

[MrPicky]

They are terminating your contract early and will attempt to get away with only paying your net pay after tax, they save on the NI payments BUT you can't reclaim the tax if you stay unemployed for the rest of the financial year so technically you lose out and could go to a tribunal over this.

Unless this situation is explicitly stated in your contract of employment (or is the norm, i.e. everybody gets this sort of termination) then the payment is for breaking your contract and is free of tax and NI up to £30K including any redundancy payment.

You also need to ensure that there is an agreement to pay any benefits (health insurance) and pension and company car as though you worked for the full 3 months.

IANAL

Russ

[New POD]

Basically Ignore the new job. Say you resigned to go start a university course in October, and You gave 3 months notice, because you need to be employed for the next 3 months, because you need the cash.

The gardening leave is because you might steal secrets, but you want to work for them.

So YES they should pay you the 3 months, but if pushed you need to be prepared to be told to come to work, and work. If they made you redundant, you could get the money tax free, and they'd save NIC payments, so you could play hard ball and claim unfair dismissal if they try and terminate contract without pay.

Now then this leads to the new Job. What's to stop you starting it whilst on gardening leave ? There's most likely a clause saying you can't work for anyone else without permission ? But what they don't know about can't harm them or you. Just start on Emergency tax ?

If your contract is terminated by old employer, then you can start at new one sooner, which the new employer will be happy about, so I think it comes down to your greed. I don't mean to sound horrible, but if you could have resigned and they'd said "Well it's 3 months notice, but tell us what date you need to leave and we will pay you to then", you'd have jumped at the chance for a shorter notice period. So why are you trying to get money from them for doing what you wanted.

[Zeeky]

They are in breach of contract by ending your employment two months early. You may sue them for compensation for your net loss as a consequence. You have a duty to mitigate your loss. If you start work at your new job in July then you just need to calculate your net loss, if any.

Employers often pay a sum equivalent to the loss when you leave to avoid being sued. If this happens and you do work in what would have been the notice period you would not be obliged to return your net gain to your former employer. In that case you can profit from your dismissal.

You could ask for payment in lieu of notice but if they refuse to pay this you can only sue for your net loss.

[Zeeky]

MrPicky said:

They are terminating your contract early and will attempt to get away with only paying your net pay after tax, they save on the NI payments BUT you can't reclaim the tax if you stay unemployed for the rest of the financial year so technically you lose out and could go to a tribunal over this.

If payment in lieu of notice is paid net (and it should be as it isn't earnings) then it should not be paid with your wages.

[MrPicky]

Zeeky said:

MrPicky said:

They are terminating your contract early and will attempt to get away with only paying your net pay after tax, they save on the NI payments BUT you can't reclaim the tax if you stay unemployed for the rest of the financial year so technically you lose out and could go to a tribunal over this.

If payment in lieu of notice is paid net (and it should be as it isn't earnings) then it should not be paid with your wages.

Payment should be made gross because your current employer cannot assume anything about your tax position before employment, during employment or after employment, merely the part of your taxes that they have paid to HMRC and the earnings they have declared for you.

[Zeeky]

Unless he has a term in his contract that entitles him to payment in lieu of notice this payment is most likely to be for damages and not payment under his contract of employment. It should not be paid through his wages payment which is subject to tax and NI deductions.

The tax on damages for breach of contract is not tax on earnings. It is assessed separately and is not taxable below £30,000.

[MrPicky]

Zeeky said:

Unless he has a term in his contract that entitles him to payment in lieu of notice this payment is most likely to be for damages and not payment under his contract of employment. It should not be paid through his wages payment which is subject to tax and NI deductions.

The tax on damages for breach of contract is not tax on earnings. It is assessed separately and is not taxable below £30,000.

I entirely agree with what you said in your last post.

But in the first quoted post you said that payment is net (which is after deductions), I said gross which is the salary paid in full without deductions. I believe that the £30,000 also includes any redundancy paid so is not just the damages.