Redundancy Payment Queries

**formant** · 30 December 2012, 07:39

My other half resigned to move to a different employer a few months ago. He was offered pay in lieu of notice and took it. It was paid during the normal pay run at the end of his notice period.

**escapeUK** · 30 December 2012, 08:26

Originally posted by lynnestuart View Post

Hi I am looking for some advice. My hubby is being made redundant on 31 December 2012 and not having to return to work after that date. He has been through the consultation process. He is entitled to 1 months notice and 6 weeks pay. At his last meeting today he was advised that his redundancy payment would be via cheque in the next 10 days and his months notice would be paid into his account at the end of January and not on the date he actually leaves the company. Is this correct? There has been mention of payment in lieu of notice in email correspondence but I am not sure what this actually means. I have been on numerous websites but none state whether payment in lieu is paid when he leaves or when the actual notice period ends. Any help would be much appreciated. Thanks

In lieu of notice simply means that he gets the months notice money without having to work for it, which sounds to be the case here as he is not having to return to work after the 31st.

Yes it would seem correct that he would be paid by cheque and his notice by payroll. The redundancy payment will be tax free (upto £30k I believe) the notice money will be taxed as normal, does he normally get paid at the end of the month?

**mudskipper** · 30 December 2012, 12:04

Originally posted by escapeUK View Post

In lieu of notice simply means that he gets the months notice money without having to work for it, which sounds to be the case here as he is not having to return to work after the 31st.

Yes it would seem correct that he would be paid by cheque and his notice by payroll. The redundancy payment will be tax free (upto £30k I believe) the notice money will be taxed as normal, does he normally get paid at the end of the month?

Not necessarily.

PILON is only taxable if it's specifically stated in the employment contract that it will be paid, or it is 'normal' for the employer to pay it. It can make a big difference, so check it out and, if it's not in the employment contract, argue to get it tax free.

Check out this link

Termination payments and benefits: payments in lieu of notice (PILONs) and gardening leave: general

**Jessica@WhiteFieldTax** · 30 December 2012, 12:20

Mudskipper is correct re Pilons - their taxability or not is contentious, and it's worth taking advice.

As regards dates of payment, there are no hard and fast rules, and I'm not aware it's something that has ever exercised the Employment Tribunals - presumably as if anyone took a case on it, it would be solved by the time the case was heard.

I've seen plenty of cases with redundancy / Pilon included in normal pay run, although personally when've made redundancies I've preferred to pay peope in full on their last day.

**escapeUK** · 30 December 2012, 12:39

Originally posted by mudskipper View Post

PILON is only taxable if it's specifically stated in the employment contract that it will be paid, or it is 'normal' for the employer to pay it. It can make a big difference, so check it out and, if it's not in the employment contract, argue to get it tax free.

Who now days pays anything that isnt stipulated in the employment contract. Hey we really like you so we are giving you an extra months wages, tax free too.

If I was doing the redundancy, and you argued that your notice payment was not normal, or not in your contract I would get you to put that in writing and then not pay you it. More money saved for the struggling company.

**mudskipper** · 30 December 2012, 12:42

Originally posted by escapeUK View Post

Who now days pays anything that isnt stipulated in the employment contract. Hey we really like you so we are giving you an extra months wages, tax free too.

If I was doing the redundancy, and you argued that your notice payment was not normal, or not in your contract I would get you to put that in writing and then not pay you it. More money saved for the struggling company.

Paid notice is normal. Payment in Lieu of Notice isn't necessarily. If a company normally (or even sometimes) requires people to work their notice, then the PILON is not taxable. The employment contract would need to stipulate that the employee would receive payment in lieu of notice, rather than simply notice. So probably less likely than you'd think.

**kingcook** · 30 December 2012, 18:21

Originally posted by lynnestuart View Post

Hi I am looking for some advice. My hubby is being made redundant on 31 December 2012 and not having to return to work after that date. He has been through the consultation process. He is entitled to 1 months notice and 6 weeks pay. At his last meeting today he was advised that his redundancy payment would be via cheque in the next 10 days and his months notice would be paid into his account at the end of January and not on the date he actually leaves the company. Is this correct? There has been mention of payment in lieu of notice in email correspondence but I am not sure what this actually means. I have been on numerous websites but none state whether payment in lieu is paid when he leaves or when the actual notice period ends. Any help would be much appreciated. Thanks

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Redundancy Payment Queries