Redundancy questions

[alistair1234]

As per my other thread yesterday my employer has announced a voluntary redundancy programme. I’ve got a couple of questions I wondered if anyone could help with. I have been though this twice before but it was when I was a lot younger and before I had a mortgage so feeling a bit more pressure this time.

If you don’t take the offer of VR now and they have to conduct a process of reapplying for positions in the new structure, if you are unsuccessful and you face compulsory redundancy, is that likely to just be on statutory terms? I know they can still give enhanced and they probably don’t want to tell us that now as it defeats the point of the VR process, but what is the general consensus?

Also, I’m fairly confident I know this, but someone quite senior gave us the opposite yesterday. The PILON is taxable and it is only the redundancy part enhanced/statutory (up to £30k) that isn’t. Is that right?

[CzechItOut]

Typically companies do offer enhanced terms for voluntary redundancy. That doesn't mean that mandatory redundancy is at statutory rates, what does your contract say?

You are right, PILON and any unused holiday allowance is taxable at the usual rate.

[omniflow]

Definitely right, PILON is taxable and, much to my surprise, PILON does not include payments such as car allowance or mortgage subsidy. How it works if you actually have a company car, I have no idea.

[Jasandjules]

alistair1234 said:

Also, I’m fairly confident I know this, but someone quite senior gave us the opposite yesterday. The PILON is taxable and it is only the redundancy part enhanced/statutory (up to £30k) that isn’t. Is that right?

PILON is now taxable yes. Changed a year or two ago, I suspect a few HR people/Employment Lawyers may have missed that.

Your Loss of Employment payment is tax free.

[alistair1234]

Another question if I may.

My employer is saying that both the enhanced redundancy payment and the PILON are without my car allowance, I think because they deem it as as benefit. Are they allowed to do that?

When i was furloughed it included car allowance, so can't understand why the above doesn't.

[Gixer968CS]

With an enhanced redundancy payment your employer can set whatever terms they like as they don't have to do any of it. Some will have a mechanism (a month for every year worked etc) others may say simply "here's £50k see you later". So whether your car allowance is used in any enhanced calculation is entirely up to them.

[alistair1234]

Thanks for the above. That answers the enhanced redundancy element, what about my PILON?

The car allowance is a contractual benefit, why would that not be included?

[Jasandjules]

alistair1234 said:

Thanks for the above. That answers the enhanced redundancy element, what about my PILON?

The car allowance is a contractual benefit, why would that not be included?

What does your contract say? Is there a term in relation to Pilon which sets out the basis i.e. salary only. If not, then you are correct in that it is contractual and thus should be included.

[Sy1441]

alistair1234 said:

Another question if I may.

My employer is saying that both the enhanced redundancy payment and the PILON are without my car allowance, I think because they deem it as as benefit. Are they allowed to do that?

When i was furloughed it included car allowance, so can't understand why the above doesn't.

I've been made redundant a few times and have also been on the other side of the table making people redundant a few times. Oddly the latter was worse than the former for me.

Anyway, car allowance or company car entitlement haven't been included in any of my packages and it's all been from big multinationals with unlimited HR resources so I'd say that was correct.

I negotiated a VR before Christmas as I knew there were cuts coming. Having been through the process a couple of times I now look on it as free money and if a company is willing to write cheques rather than go through the painful process of consultation I'd be at the front of the queue. I'm a director of my own Ltd company now so hoping I'm not made redundant again haha.

[Sy1441]

Sy1441 said:

I've been made redundant a few times and have also been on the other side of the table making people redundant a few times. Oddly the latter was worse than the former for me.

Anyway, car allowance or company car entitlement haven't been included in any of my packages and it's all been from big multinationals with unlimited HR resources so I'd say that was correct.

I negotiated a VR before Christmas as I knew there were cuts coming in the company I worked for in senior management. Having been through the process a couple of times I now look on it as free money and if a company is willing to write cheques rather than go through the painful process of consultation I'd be at the front of the queue. I'm a director of my own Ltd company now so hoping I'm not made redundant again haha.

[parabolica]

Sy1441 said:

alistair1234 said:

Another question if I may.

My employer is saying that both the enhanced redundancy payment and the PILON are without my car allowance, I think because they deem it as as benefit. Are they allowed to do that?

When i was furloughed it included car allowance, so can't understand why the above doesn't.

I've been made redundant a few times and have also been on the other side of the table making people redundant a few times. Oddly the latter was worse than the former for me.

Anyway, car allowance or company car entitlement haven't been included in any of my packages and it's all been from big multinationals with unlimited HR resources so I'd say that was correct.

I negotiated a VR before Christmas as I knew there were cuts coming. Having been through the process a couple of times I now look on it as free money and if a company is willing to write cheques rather than go through the painful process of consultation I'd be at the front of the queue. I'm a director of my own Ltd company now so hoping I'm not made redundant again haha.

Multinational O&G company here and we include a loss-of-benefits payment in the severance figure (in addition to SRP, PILON and Enhanced Redundancy and accrued unused vacation) which accounts for loss of vacation accrual, car allowance and non-cash benefits for the PILON period. So some employers do offer it, but I don't think it's a legal requirement. The last place I worked for was in the same industry and only offer SRP and only 1 week of consultation.