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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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Experience:  Qualified Employment Solicitor
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Question about being terminated with notice versus redundant. BACKGROUND: EU

Question about being terminated with... Show More
Question about being terminated with notice versus redundant.
EU Director in very large company.
Been in company for 18 months, 3 months notice period.
Performance has been filed as good.
My manager (EU President) was fired.
New leader from other area of world was appointed and is consolidating areas.
My role isn't needed.
They served me notice of termination as follows:
'I write further to your meeting with XXXXtoday. As you are aware, due to a reorganisation within the EMEA team and a review of the business needs, the Company has decided that there is no longer a need for your role and you are hereby given notice of the termination of your role. Your employment will end on 30th October 2015 and you will be paid in lieu of your three months’ notice period'
They are making the role redundant but terminating me by notice period because I am <2 years in the company and they feel that means I have less rights and they don't have to actually make me redundant.
If they do it this way, I get paid in payroll and taxed as normal salary.
If they did it the way of the truth, redundancy, they would end up paying not much more (though they should have had a consultation period I guess and may have to add a month for that). But I would benefit much more with paying far less tax because of the up to 30k tax free law so net money for me would be much better which would help without yet having a job to go to.
Do I have any right to enforce that it is a redundancy and normal termination is not appropriate and it should be done as redundancy/compromise agreement or can they just do this their way? Bearing in mind their comms to me does prove the role is being eliminated which of course is the truth and a well known fact.
My wife has been having operations under company medical insurance and needs one more operation which would be in November. Do I have any teeth for leverage for them to extend my end date to that operation or is it purely a goodwill on their part if they did that or could I in any way ask for the costs of it to be covered?
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Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. I have just answered the first part of your question separately but can deal with the second one here. Can i check if your contract states you could be paid in lieu of notice please?
Customer reply replied 2 years ago.
Hi ben, David here, yes they intend to pay notice period and actually I have a bonus which they are going to pay 100% pro rata which is normal practice when they exit people. BTW I saw some bad practices in the company and know some dirty laundry so I think they will want me to sign a compromise in any event.
Customer reply replied 2 years ago.
also I havent seen your response to the first question, didnt show up in the page ?
I think it was from a diffent account - i assume it was you as the facts are the same, please see here:
What i was asking about this issue is not whether they will pay your notice period, but if your contract said that they are allowed to pay you in lieu of notice? Thanks
Customer reply replied 2 years ago.
12.7 As an alternative to serving notice pursuant to clause 14.1 and without prejudice to theprovisions of clauses 12.2 and 12.3, the Company may terminate your employment withimmediate effect by notifying you (a) that it is doing so and (b) that it will make a paymentin lieu of notice. If the Company exercises its right to terminate your employmentpursuant to this clause, the payment in lieu of notice will be paid within 14 days, and willconsist of the basic salary (but not the other benefits) to which you would have beenentitled during the period of notice of termination provided for in clause Once notice has been given, either by the Company or you pursuant to clause 14.1 andwithout prejudice to the provisions of clause 12.2 and 12.3, the Company may terminateyour employment with immediate effect by notifying you (a) that it is doing so and (b) thatit will make a payment in lieu of the remainder of your notice period. If the Companyexercises its right to terminate your employment pursuant to this clause, the payment inlieu of notice will be paid within 14 days, and will consist of the basic salary (but not theother benefits) to which you would have been entitled during the unexpired period of notice.FYI
Below are clauses 12.2 12.3 and 14.112.2 This agreement and your employment with the Company hereunder may be terminatedimmediately by the Company without prior notice if you at any time:(A) commit any serious or repeated or continual breach of any of your obligations(B) are guilty of any serious misconduct or serious neglect in the discharge of your(C) have a bankruptcy order made against you or if you make any arrangement or(D) are convicted of any criminal offence other than an offence which, in the(E) by your actions or omissions, bring the name or reputation of the Company orunder this agreement; orduties under this agreement; orcomposition with your creditors or have an interim order made against youpursuant to Section 252 of the Insolvency Act 1986; orreasonable opinion of the Company, does not affect your position as anemployee of the Company; orany Group Company into serious disrepute or prejudice the interests of thebusiness of the Company or any other Group Company; orAvaya UK Registered Office: Avaya House, Cathedral Hill, Guildford, Surrey GU2 7YL Registered in England No.(###) ###-####
(F) become of unsound mind or are or become a patient for the purpose of any(G) are convicted of an offence under any present or future statutory enactment orAny delay by the Company in exercising such right to termination shall not constitute awaiver thereof.12.3 In the event of termination pursuant to clause 12.2, the Company shall not be obliged tomake any further payment to you beyond the amount of any remuneration and paymentin lieu of outstanding untaken holiday entitlement actually accrued up to and including thedate of such termination and the Company shall be entitled to deduct from suchremuneration any sums owing to it or to any other Group Company by you to whichdeduction you expressly hereby consent.statute relating to mental health; orregulation relating to insider dealing.14. Deductions14.1 You agree that the Company may apply any sums, which may be due to you (including,without limitation, accrued salary) against any sums, which may be due from you to theCompany including but not limited to compensation paid in advance or reimbursement ofoverpaid wages.
The clause allows them to terminate your employment with immediate effect by paying you in lieu of notice. So you cannot force them to extend your end date and that is something left entirely at their own discretion. The same applies to them paying for the operation separately. You could of course appeal to their better side and hope they agree to let you serve your notice instead of paying you in lieu.
Hope this answer this part of the question did you see my other answer to the first part?
Customer reply replied 2 years ago.
Hi ok, understood, yes I did see the first answer. the thing about a redundancy with compromise agreement is that there is an agreed settlement amount in total, which can be made up of whatever is relevant, I thought that total can be a 'package' and as such the package comes under a redundancy package as a total and up to 30k of it isn't taxed. I didn't think notice period had to be seperated out, only the normal salary to the point of the exit agreement date no?
No it doesn't work like that I'm afraid. If the notice period is in your contract then it will be taxable, you can see here:
HMRC will not just allow any payment to be made tax free so there are limited circumstances in which a notice period payment will be tax free.
I trust this has answered your queries. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page) on both answers. If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
Customer reply replied 2 years ago.
Yes thanks. I think I\ll suggest to them that they just pay me a total amount which culminates in 'an exit settlement' for loss off office. do you think that would be ok? thats my final question and then will rate highly and pay.
Many try and that but do not always get away with it - as mentioned HMRC is not one to be fooled easily so if there is any doubt as to whether this is a genuine exit settlement as claimed, they could look into it in more detail and as soon as they see your contract they would know it was not one. So you could still be liable for tax. But if you want to try it then you can do so
Customer reply replied 2 years ago.
ok thanks, ***** ***** think I will if its not standard practice. I'm going to ask some other questions and pay again soon.
No problem, get back to me any time you want - you can also start your query with 'for Ben Jones' so they get directed to me as I will be familiar with your situation. Thank you