Making a key worker redundant
Discussion
Hopefully, a quick and easy one.
My wife has been told today that she is being made redundant. The business is a small one:
-- Two directors.
-- One shop manager, managing the shop and the website.
-- One accounts manager, my wife.
She handles:
-- Book-keeping
-- Payroll
-- Month-end
-- HMRC
-- VAT returns
-- Petty cash
-- Credit control
-- Cash flow
-- etc.
The directors and shop manager do not get involved in any accounting work, nor have the skills to do so. She is being made redundant because they can no longer afford to pay her.
My question is this:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
My wife has been told today that she is being made redundant. The business is a small one:
-- Two directors.
-- One shop manager, managing the shop and the website.
-- One accounts manager, my wife.
She handles:
-- Book-keeping
-- Payroll
-- Month-end
-- HMRC
-- VAT returns
-- Petty cash
-- Credit control
-- Cash flow
-- etc.
The directors and shop manager do not get involved in any accounting work, nor have the skills to do so. She is being made redundant because they can no longer afford to pay her.
My question is this:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
Edited by selwonk on Wednesday 24th May 09:28
Thanks for the input folks.
We've done some reading up tonight and appreciate that an inability to pay wages is a genuine reason to make someone redundant. Naturally, she wants to take the redundancy ASAP; we just want to make sure everything is being done properly.
They may, however, have been a bit sharp. About 10 weeks ago they insisted that she reduce her days from 4 to 3. About 5 weeks ago my daughter broke her femur and is, essentially, housebound. They insisted at that point that she spend more time at home and reduced her days to 2. None of this was formally agreed; they simply insisted.
It looks as though the redundancy calculation can be made on the reduced hours over the last 12 weeks in which case they look to have pulled a fast one. We'll see what is offered.
One other question; does the size of the company and the headcount make any difference to the redundancy process? They told her she was being made redundant today.
-- It has not been discussed previously despite them telling her that they made the decision in February.
-- They have not put anything in writing.
-- They have not calculated her redundancy pay.
-- They have not even checked what her notice period is.
I thought there was a formal process that should be followed?
Cheers.
We've done some reading up tonight and appreciate that an inability to pay wages is a genuine reason to make someone redundant. Naturally, she wants to take the redundancy ASAP; we just want to make sure everything is being done properly.
They may, however, have been a bit sharp. About 10 weeks ago they insisted that she reduce her days from 4 to 3. About 5 weeks ago my daughter broke her femur and is, essentially, housebound. They insisted at that point that she spend more time at home and reduced her days to 2. None of this was formally agreed; they simply insisted.
It looks as though the redundancy calculation can be made on the reduced hours over the last 12 weeks in which case they look to have pulled a fast one. We'll see what is offered.
One other question; does the size of the company and the headcount make any difference to the redundancy process? They told her she was being made redundant today.
-- It has not been discussed previously despite them telling her that they made the decision in February.
-- They have not put anything in writing.
-- They have not calculated her redundancy pay.
-- They have not even checked what her notice period is.
I thought there was a formal process that should be followed?
Cheers.
Gotcha. Makes things clearer; thank you.
In respect of the potentially reduced payout, in a nutshell, my wife has been working 4 days a week for 6 years. The company decided to make her redundant in February but did not discuss this with her. Over the last 10 weeks, they have insisted on her reducing her hours to 3 and then 2 days. This was a unilateral decision. Yesterday they told her she was being made redundant[1].
They have not told her what her redundancy payment will[2] be but we suspect that they will calculate it on 2 rather than 4 days, or on an average of the days worked over the last 12 weeks. If they had discussed the redundancy with her in February, then we would have been able to consider the ramifications of accepting the reduced hours[3].
Also, this company is not hugely profitable but is also far from insolvent. We are not really interested in any potential compensation that might arise from a tribunal case; it is really the principle of the matter. We feel that they have taken advantage of my wife's good nature and that they need to understand that that's not on.
Some queries from above:
[1] Should there not have been a previous meeting to discuss the redundancy followed by a consultation period?
[2] Should this not have been prepared in writing to be presented during the meeting to tell her she is now redundant?
[3] If points 1. and 2. had been followed, we would have been forewarned. Is this not somewhat underhand?
None of this will affect the outcome of the redundancy; that is now a foregone conclusion. We just want to look after her interests and ensure the process has been carried out fairly. We may be pleasantly surprised and find that the proposed payment is completely fair, but if it isn't it's not something that we would take lying down.
One final question. Is it correct that my wife should accept the redundancy payment regardless of how it has been calculated and that she can then seek legal advice after the event if we feel that the calculation was unfair? This would, naturally, serve us well in respect of wanting to take the money and run, but we don't want to close the door completely, so to speak.
Thanks again!
In respect of the potentially reduced payout, in a nutshell, my wife has been working 4 days a week for 6 years. The company decided to make her redundant in February but did not discuss this with her. Over the last 10 weeks, they have insisted on her reducing her hours to 3 and then 2 days. This was a unilateral decision. Yesterday they told her she was being made redundant[1].
They have not told her what her redundancy payment will[2] be but we suspect that they will calculate it on 2 rather than 4 days, or on an average of the days worked over the last 12 weeks. If they had discussed the redundancy with her in February, then we would have been able to consider the ramifications of accepting the reduced hours[3].
Also, this company is not hugely profitable but is also far from insolvent. We are not really interested in any potential compensation that might arise from a tribunal case; it is really the principle of the matter. We feel that they have taken advantage of my wife's good nature and that they need to understand that that's not on.
Some queries from above:
[1] Should there not have been a previous meeting to discuss the redundancy followed by a consultation period?
[2] Should this not have been prepared in writing to be presented during the meeting to tell her she is now redundant?
[3] If points 1. and 2. had been followed, we would have been forewarned. Is this not somewhat underhand?
None of this will affect the outcome of the redundancy; that is now a foregone conclusion. We just want to look after her interests and ensure the process has been carried out fairly. We may be pleasantly surprised and find that the proposed payment is completely fair, but if it isn't it's not something that we would take lying down.
One final question. Is it correct that my wife should accept the redundancy payment regardless of how it has been calculated and that she can then seek legal advice after the event if we feel that the calculation was unfair? This would, naturally, serve us well in respect of wanting to take the money and run, but we don't want to close the door completely, so to speak.
Thanks again!
I did wonder whether the single redundancy precluded the need for the complete process. I sort of agree about the letter, but bear in mind that yesterday she basically left the company after taking pay in lieu of notice. She will have to return her laptop on Monday, but has essentially been made redundant with nothing in writing. They didn't even know how many weeks notice to pay her for; she had to tell them!
Thanks again for the excellent input. We really don't want to have to do anything so hopefully this week will see a fair offer made and we can move on.
We've done what we think is a fair calculation and compared it with the worst case scenario and it would not be worth taking any action.
You are, of course, quite correct about the costs and hassle. We were hoping that if things had very clearly been done badly that it would give us a good bargaining position. As you say, we need to put our feelings in writing and go from there.
Thanks again and I'll provide an update during the week.
Cheers.
We've done what we think is a fair calculation and compared it with the worst case scenario and it would not be worth taking any action.
You are, of course, quite correct about the costs and hassle. We were hoping that if things had very clearly been done badly that it would give us a good bargaining position. As you say, we need to put our feelings in writing and go from there.
Thanks again and I'll provide an update during the week.
Cheers.
Just a quick update...
Somewhere between being made redundant on Friday and this morning, they have realised that they should have followed the correct procedure. So it's now:
1. First meeting last Friday to discuss redundancy.
2. Second meeting today to confirm redundancy.
3. Third meeting on Friday to confirm redundancy package.
It's all a bit of a cock up but so far so good. I'll keep you posted.
Thanks again.
Somewhere between being made redundant on Friday and this morning, they have realised that they should have followed the correct procedure. So it's now:
1. First meeting last Friday to discuss redundancy.
2. Second meeting today to confirm redundancy.
3. Third meeting on Friday to confirm redundancy package.
It's all a bit of a cock up but so far so good. I'll keep you posted.
Thanks again.
We've not pushed the matter about due process at all. We're just hopeful that it's a good sign that they will do everything properly. We know what she should be due if the online calculator is used and with a bit of luck an amicable arrangement can be reached.
Edited by selwonk on Monday 15th May 13:45
Just a quick update and another question...
They have now involved the Federation of Small Business and reneged on their offer of payment in lieu of notice. They are, however, calculating the redundancy package on 4 rather than 2 days, which is good.
My wife has now received her second redundancy consultation letter and will be having the final meeting on Friday. This will be the meeting to agree that the redundancy will go ahead, a foregone conclusion. My wife will also tell them whether she wishes to work her notice or not.
The letter offers two clear choices:
1. To remain working as normal, or from home if she prefers.
2. To choose not to work her notice, and leave would be granted but would be unpaid.
She does not wish to work her notice period of 5 weeks.
Does this mean that her finish date would then be Friday? Is there any way that they can try to delay the redundancy payment until the end of the 5 weeks?
She feels like the sword of Damocles is hanging over her and just wants to leave and crack on with finding a new job.
Thanks again.
They have now involved the Federation of Small Business and reneged on their offer of payment in lieu of notice. They are, however, calculating the redundancy package on 4 rather than 2 days, which is good.
My wife has now received her second redundancy consultation letter and will be having the final meeting on Friday. This will be the meeting to agree that the redundancy will go ahead, a foregone conclusion. My wife will also tell them whether she wishes to work her notice or not.
The letter offers two clear choices:
1. To remain working as normal, or from home if she prefers.
2. To choose not to work her notice, and leave would be granted but would be unpaid.
She does not wish to work her notice period of 5 weeks.
Does this mean that her finish date would then be Friday? Is there any way that they can try to delay the redundancy payment until the end of the 5 weeks?
She feels like the sword of Damocles is hanging over her and just wants to leave and crack on with finding a new job.
Thanks again.
edc said:
You can't have your cake and eat it. The company respects and honours the contractual notice. But she doesn't want to work. Why would she expect to be paid? The company may have a right to exercise PILON but this would be in the contract.
She doesn't expect to be paid; they offered her PILON then withdrew it.McCrae1971 said:
Take advice on not wanting to work her notice as she could loose out on that payment. It's the companies decision if they want employees to work their notice.
Make sure everything is in writing and if in doubt do not sign anything.
I'd always recommend taking someone in to the meeting who understands the process.
We have it in writing that they are offering her the choice of not working her notice period.Make sure everything is in writing and if in doubt do not sign anything.
I'd always recommend taking someone in to the meeting who understands the process.
They did offer to allow her to have someone in on the meeting but a) she is not a union member and b) it's all been done at such short notice it's not practical.
Just another quick update following a call to ACAS...
In their opinion, my wife can not be forced to work the notice period, as it has been offered in writing that she can decline to do so if she wishes and will not be paid. That's fine.
It will not affect her redundancy payment but they can choose to pay it after the notice period has expired. Great. We fully expect that the FSB will tell them to do that.
So, the only other thing that might be lurking is an unfair redundancy package as she has not been given any figures yet. She will ask tomorrow for the redundancy payment to be brought forward to coincide with her leaving but don't really expect them to do that now.
In their opinion, my wife can not be forced to work the notice period, as it has been offered in writing that she can decline to do so if she wishes and will not be paid. That's fine.
It will not affect her redundancy payment but they can choose to pay it after the notice period has expired. Great. We fully expect that the FSB will tell them to do that.
So, the only other thing that might be lurking is an unfair redundancy package as she has not been given any figures yet. She will ask tomorrow for the redundancy payment to be brought forward to coincide with her leaving but don't really expect them to do that now.
She is trying to keep everything on an amicable footing. So far there is no animosity. We fear that might change tomorrow.
We have nothing in writing about the offer; we had hoped this would have been provided by now. We just have to hope it's fair.
The most worrying part is if the payment is deferred until the end of the notice period. On the basis that they are making her redundant on the basis that they can not afford to pay her, we wanted to try to ensure that we had the money at the earliest opportunity.
There is, naturally, a great deal of self-interest by both parties. She does not need the stress of any sort of animosity, but neither does she want to be trodden all over.
We have nothing in writing about the offer; we had hoped this would have been provided by now. We just have to hope it's fair.
The most worrying part is if the payment is deferred until the end of the notice period. On the basis that they are making her redundant on the basis that they can not afford to pay her, we wanted to try to ensure that we had the money at the earliest opportunity.
There is, naturally, a great deal of self-interest by both parties. She does not need the stress of any sort of animosity, but neither does she want to be trodden all over.
Breadvan72 said:
Taking legal advice from ACAS is like taking legal advice from a random car forum. In other words: plain dumb.
So, who else can we turn to? We've gratefully accepted all the advice in this thread and ACAS agrees with pretty much everything above. Neither of us has been made redundant before. We have read the statutory obligations in respect of redundancy, but it doesn't seem to be worth the paper it's written on.We're not stupid people. We're just trying to carefully thread our way through a tricky situation!
Breadvan72 said:
There are people who specialise in giving advice about stuff to other people . Those adviser people have trained to give that advice. They are insured against the effects of giving wrong advice. Those people have bills to pay, so they tend to charge for their advice. I assume that everyone else in every other job works for free, but those adviser type people are quirky and ask for payment for doing their jobs. Weird, I know.
The statutory obligations are worth more than the paper they are written on. Free advice on the net may be worth what you pay for it.
My recommendation, at a modest rate (and it's not me, I am very expensive and only work on referrals) is Marty Byrne at Oxford Employment law.
My apologies; I've clearly rubbed you up the wrong way but I'm not sure how. We are very grateful for all the responses in the thread. The statutory obligations are worth more than the paper they are written on. Free advice on the net may be worth what you pay for it.
My recommendation, at a modest rate (and it's not me, I am very expensive and only work on referrals) is Marty Byrne at Oxford Employment law.
I certainly don't "...diss expertise in all its forms". I haven't asked for anybody's expertise for free; I am quite happy to pay for professional services. What I have done is asked questions and sought opinion. We've taken it all on board and it's been very useful.
We have also taken opinion from an employment specialist. They offered their expert opinion, very briefly, for free. They concur with the opinion in this thread; any legal proceedings would be throwing good money after bad.
We also spoke to ACAS as we didn't know any better; we don't have any experience of employment matters above and beyond being employees. My mistake, clearly.
I hoped that my updates would demonstrate that we've moved on from dwelling on the due process and are now focusing on an amicable parting of the ways.
Clearly, I've not succeeded and have made a mistake in seeking more opinion from those with more experience to help prepare for the final meeting on Friday. I'm sorry about that and won't trouble you any further.
Thanks again for all the help that has been provided.
We have also taken opinion from an employment specialist. They offered their expert opinion, very briefly, for free. They concur with the opinion in this thread; any legal proceedings would be throwing good money after bad.
We also spoke to ACAS as we didn't know any better; we don't have any experience of employment matters above and beyond being employees. My mistake, clearly.
I hoped that my updates would demonstrate that we've moved on from dwelling on the due process and are now focusing on an amicable parting of the ways.
Clearly, I've not succeeded and have made a mistake in seeking more opinion from those with more experience to help prepare for the final meeting on Friday. I'm sorry about that and won't trouble you any further.
Thanks again for all the help that has been provided.
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