Making somebody redundant
Discussion
A good friend is in the unfortunate position of having to make an employee redundant.The employee has worked since Jan 05 and his 'take home pay' after tax and NI is £250 per week.He has never had to do this before so does anybody know how much notice does my friend have to give and how much will it cost him to make the employee redundant??
I believe I'm right in saying that pay in lieu of notice (IE you pay them their notice to leave now)is free of tax to the employee. Seems a shame th eemployee is being made redundant just before their 2 year anniversary. Your mate might just want to be extra clear that th ejob is no longer required - or there could be a tribunal claim for unfair selection for redundancy.
An employee has to serve 2 years' service to qualify for a redundancy payment.
Yes, your mate should clarify, in writing, that the postion has become redundant as a reason for the employee's dismissal.
Jasper Gilder said:
Your mate might just want to be extra clear that th ejob is no longer required - or there could be a tribunal claim for unfair selection for redundancy.
Yes, your mate should clarify, in writing, that the postion has become redundant as a reason for the employee's dismissal.
1) Notice depends on contract. Can be paid tax free (under certain circumstances), but employer can take this benefit.. i.e. pay net pay equivalent, as it is an award for breach of contract..but does depend on contract of employment
2) Under regs introduced October 04, need to go through meeting procedure with agenda & minutes
3) Basically redundancy pay depends on age & length of service. Award is based on gross pay (subject to a cap) not net pay
2) Under regs introduced October 04, need to go through meeting procedure with agenda & minutes
3) Basically redundancy pay depends on age & length of service. Award is based on gross pay (subject to a cap) not net pay
Make sure that all people who are doing the same job have been looked at to ensure that there is a valid selection process has been followed. Obviously irrelevant if there is only one person doing the job.
Any redundancy money is usually tax free and at the moment this is up to a maximum £290 per year of service I believe although this is due for review at the beginning of October. This payment is usually one weeks pay per year of service. However, if the person is over 41 our company pay 1.5 weeks per year. I think that this may be a statutory thing.
Our normal process is.
Sent letter saying that they may be redundant and invitation to a meeting.
Meeting discuss any reasons for changing job scope alternative employment etc.
Make a discission and write to the person inviting to a dismissal meeting.
Have meeting.
Make a discission and send termination letter.
Had to make 3 people redundant over the last 3 months, not nice but you cannot employ people if there is no job!
Any redundancy money is usually tax free and at the moment this is up to a maximum £290 per year of service I believe although this is due for review at the beginning of October. This payment is usually one weeks pay per year of service. However, if the person is over 41 our company pay 1.5 weeks per year. I think that this may be a statutory thing.
Our normal process is.
Sent letter saying that they may be redundant and invitation to a meeting.
Meeting discuss any reasons for changing job scope alternative employment etc.
Make a discission and write to the person inviting to a dismissal meeting.
Have meeting.
Make a discission and send termination letter.
Had to make 3 people redundant over the last 3 months, not nice but you cannot employ people if there is no job!
Thanks for the replies.My friend is closing a business where only the employee and one other person work.The other person has only worked there a few months so has no entitlement to redundancy pay.The company was set up solely to service one client who is now doing what my friends company did in house.
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