Reply to: Friday to Monday....

[ASB]

The only way they can do "voluntary redundancy" like that is if it is a compromise agreement where you agree not to sue their a**es off.

That agreement would not be enforceable. You cannot simply give up a legal right. Even with the presence of such an agreement the employer could still be taken to an EAT.

The presence of the agreement should have absolutely no effect on the outcome, that is decided by on the facts.

It would probably have an effect on the level of compensation though.

[thunderlizard]

Clearly, I *think* this leaves me inside IR35 by the longest chalk

That is how conventional thinking would have it, and that is what was widely cited as the reason for introducing IR35 in the first place. But since IR35 as written never got as far as mentioning friday-to-monday situations, I don't think it's a given.

If you carried on working on the same terms as you always had been as an employee, you'd be inside. But if you come in on Monday with a shiny new suit, tell them how you're going to run things, and that you've hired a substitute for next week while you go on holiday, you'd be outside. That's how I see it.

[SueEllen]

Voluntary redundancy is covered by exactly the same laws. It is still unfair dismissal if your job is not redundant. The fact that you put your hand up only overrides the selection process - everything else is the same. Talk to someone!

And good luck.

WHS

The only way they can do "voluntary redundancy" like that is if it is a compromise agreement where you agree not to sue their a**es off. The agreement has to be done with a solicitor involved on your side who you choose to ensure you aren't being shafted. In addition your employer pays for some/all of the advice.

I suggest you work out* if you want to sue them and actually get compensation out of them that isn't subject to NI and PAYE.

*HINT take some legal advice to see what more you would likely get out of them and whether it would cover your NI and PAYE.

BTW I known people in other situations who have been made "redundant" and received payments. Some of them have received more compensation as a result after taking legal advice as if a firm doesn't bother talking to a solicitor on how to get rid of staff legally now, they won't want to pay the fees for defending themselves against any legal action against them.

[TheFaQQer]

Erm, a bit more to add:

The seperation is voluntary.

I've already signed and agreed to it.

My dilemma is if it's financially viable to go back, if so under which scenario.

Thanks for all the input though, it's really opened my eyes to stuff that loyalty has probably stopped me seeing. A friend keeps telling me, "You need to think like a contractor now, company XYZ doesn't care about your mortgage, only you do"....says it all really...

It doesn't matter if the separation is voluntary or not - if they are keeping you in the same job, then any payment that they give you (whether they call it redundancy or not) is merely a bonus which attracts NI and PAYE. It's a taxable bonus for agreeing that they can terminate your contract at any stage without any further payment.

So the first calculation you need to work out is how much tax and NI are you immediately going to have to pay. After that, factor in the daily rate and tax on that. Then, and only then, can you really see how badly you are getting shafted.

I'd start looking for other work, either contract or permie, elsewhere.

[mudskipper]

Erm, a bit more to add:

The seperation is voluntary.

I've already signed and agreed to it.

My dilemma is if it's financially viable to go back, if so under which scenario.

Thanks for all the input though, it's really opened my eyes to stuff that loyalty has probably stopped me seeing. A friend keeps telling me, "You need to think like a contractor now, company XYZ doesn't care about your mortgage, only you do"....says it all really...

Voluntary redundancy is covered by exactly the same laws. It is still unfair dismissal if your job is not redundant. The fact that you put your hand up only overrides the selection process - everything else is the same. Talk to someone!

And good luck.

[harry20]

Erm, a bit more to add:

The seperation is voluntary.

I've already signed and agreed to it.

My dilemma is if it's financially viable to go back, if so under which scenario.

Thanks for all the input though, it's really opened my eyes to stuff that loyalty has probably stopped me seeing. A friend keeps telling me, "You need to think like a contractor now, company XYZ doesn't care about your mortgage, only you do"....says it all really...

[SueEllen]

It's worth getting proper advice - there are rules round redundancy that many companies play fast and loose with. If you are at risk of redundancy, the company is obliged, during the consultation period, to look for alternative suitable positions. In your case it sounds like there is one (in fact the same position). Phone ACAS for free advice.

An employment lawyer would happily give a free consultation in this situation as they know they would either get the work to sue the company for unfair dismissal or at least a fee for a compromise agreement.

[DaveB]

True, but I do know folks who have managed to hang on to their pay off and still do Friday/Monday.

Havn't had an HMRC investigation yet.

[malvolio]

Well I wouldn't be giving back any of the redundancy payment for a contract. They are making you redundant and need to pay you the redundancy payment.

Redundancy is clearly defined. You get a tax free pay off of up to £30k if your job no longer exists. If it does still exist there are two options; you take it and pay the tax on your redundancy money, or you sue for wrongful dismissal since clearly your job is not redundant. Right now it looks like the OP should be following the second option...

FWIW I took five of a client's staff through this very loop a while back, when merging the team into a shared services structure meant that the client had to lose two. I went very deeply into the legalities to ensure neither they nor the client got stuffed.

[mudskipper]

It's worth getting proper advice - there are rules round redundancy that many companies play fast and loose with. If you are at risk of redundancy, the company is obliged, during the consultation period, to look for alternative suitable positions. In your case it sounds like there is one (in fact the same position). Phone ACAS for free advice.

[eek]

I am entitled, it's a reasonable package, how much I want to give back for the sake of secured employment...is the golden question.

I guess the day rate is the key to whether being inside IR35 is worth it or not, giving back separation is worth it or not, I think that is what all of this boils down to, pros outweighing the cons.

Well I wouldn't be giving back any of the redundancy payment for a contract. They are making you redundant and need to pay you the redundancy payment.

The new contract is a distraction to partly try and confuse you. If they really want you why haven't they simply offered you a transfer from department A to department B. So go back and look at my first paragraph.

Now once you understand the redundancy payment issue do you really want to be a contractor or work for a company that is trying to cheat you. Remember as a contractor you could be out of the door at a moment or days notice so is it really worth the risk of taking of that for an IR35 contract.

Personally I would:-

1) insure you get the full redundancy payment.
2) if you get it take the IR35 contract as long as it has a reasonable escape clause
3) find another job or contract asap.

Good luck btw

[Fred Bloggs]

The OP might not want to be a contractor Mal, he's been forced into this situation.

Along with 000's of others I'm afraid.

[cojak]

The OP might not want to be a contractor Mal, he's been forced into this situation.

[Fred Bloggs]

I wouldn't be prepared to lose my redundancy money for them Fred, better to use the notice period as a permie and find another contract.

True, but I do know folks who have managed to hang on to their pay off and still do Friday/Monday.

[malvolio]

I am entitled, it's a reasonable package, how much I want to give back for the sake of secured employment...is the golden question.

You don't get to negotiate, it will be treated as earned income and liable to full PAYE and NICs. You can't be redundant if you continue doing the same job (and no it doesn't count that it's for a different bit of the company)

I guess the day rate is the key to whether being inside IR35 is worth it or not, giving back separation is worth it or not, I think that is what all of this boils down to, pros outweighing the cons.

Total salary /1000 = hourly rate, for a simple comparison. Then inside IR35 you get to keep 60-65% of it. Probably not enough.

I agree with the point about going contracting elsewhere, perhaps my loyalty is mis-guided...

I say again you want to be a contractor, be a contractor. And that needs a major mindset adjustment!