Reply to: Should you appear desperate for redundancy?

[d000hg]

To answer a couple of questions, in a nutshell, the details passed over when I transferred into current company was 2.5x notice period (which is currently 12 weeks) so that's 30 weeks worth (I know of a few people that have been made redundant after bench time, at least one of which had 12 years in so they're not totally against it so it seems.

Contract on offer ATM is 400/day. Even taking into account lack of holiday/sick pay etc. it's still well worth it to me financially.

HOWEVER - you could sign a 6-month contract and then get canned after a week. Or even before you turn up... you could give notice and agree the contract, only to have the client suddenly realise they can't afford it. This kind of thing is rare and bad luck, but DOES happen and if you have no savings, you're playing a high-risk game... one you probably can't afford to lose.

[nomadd]

If you are doing bugger all then get your head into some study and skill up. It's not so easy to get motivated but now is the ideal time to do it because once you are self-employed, time is money

Heed this advice^

And if you find you lack the motivation, then contracting is certainly not for you.

[Wanderer]

How much are you on at the moment? I'd guess £50k? If it's less than than then jump. If it's substantially more than that then sit tight. There is a formula we use here which says contract hourly rate should be permie salary / 1000. Lots of people say that's wrong but that's how much I got going from permie back to contracting and with a big redundancy pay off too. You've got to have that war chest though - it's a tough world out there. If you have a mortgage and some equity in your property then you should get a flexible mortgage while you are still permie - it may be the answer to the war chest problem.

Out of interest, to assist with steering clear of IR35 does it help if you also do work for another client?

Technically, each contract is considered on it's merits but if you are working for several clients at once then that's a pointer to being in business of your own account rather than a "disguised employee" so it may help your IR35 status.

[Peejay]

To answer a couple of questions, in a nutshell, the details passed over when I transferred into current company was 2.5x notice period (which is currently 12 weeks) so that's 30 weeks worth (I know of a few people that have been made redundant after bench time, at least one of which had 12 years in so they're not totally against it so it seems.

Contract on offer ATM is 400/day. Even taking into account lack of holiday/sick pay etc. it's still well worth it to me financially.

Out of interest, to assist with steering clear of IR35 does it help if you also do work for another client? Another ex-colleague has been keen for me to do some odd work for him now & then so I'm hoping that'll help as well.

I haven't been stuck in the same location/customer for that 14 years, have moved about a bit for the last four quite happily (different clients served by same company) which helps a bit on the CV as well...

[Wanderer]

Having skimmed through the redundancy rights on DirectGov it seems they're supposed to give me 3 months notice of redundancy as well (I've had nowt) so, as 3 months on contract is worth far more, is it worth me "throwing them a bone" & forgoing the notice period to save them 3 months salary (and risk of finding me another job close to home) or are such rights rigid?

I left a job and they didn't pay me "redundancy" but it was some other type of compensation, perhaps this was to get around the consultation period or some other "redundancy" rules. The other thing I found was that the first £30k of the pay off is TAX FREE so I got even more in redundancy than I expected though any income for the rest of the tax year gets hammered for higher rate tax because you took so much in redundancy. You can also have them put all or part of your pay off into a pension if you are that way inclined.

If you have £0 in your warchest then I wouldn't recommend you ditch the safety of your permie job an go contracting. Sit tight and bide your time. If you are doing bugger all then get your head into some study and skill up. It's not so easy to get motivated but now is the ideal time to do it because once you are self-employed, time is money.

A big opportunity of a contract coming up is tempting but if there is one then there will be others. Keep the contact details of the company and be ready to tap them when you are looking for a contract.

Good luck, whatever you do.

[d000hg]

...

Can you give any kind of ball-park idea how big the redundancy pot might be? Let's say you would be getting £250pd after tax as a contractor, how many months' contract work would it take before contract money > salary + redundancy?

[escapeUK]

I was in a similar position. My much loved permie job as IT manager for an international group of companies started to turn sour as the son of the owner got involved and he started to replace senior people with very little experience or intelligence. Over years he became a director (but this was never announced like a dirty secret). The current MD (who was a close friend) saw the writing on the wall and decided to jump ship before he was pushed out.

I ended up in a position where I had a reasonable salary, very little work and a boring but comfortable life. I was waiting, praying for that redundancy. After working there over 10 years it would have been a fair chunk.

Take a honest view, will you get the redundancy in the very short term? If not, get a contract and leave. I wish I had sooner. (I never got mine) But thank goodness for the final straw that made me quit.

[BolshieBastard]

When I was a permie, I turned down an early retirement package as we'd just moved house etc. 12 months later, work was so tulipe I jumped ship and went contracting. Never looked back since.

At the same time, a couple of people I worked with while permie also wanted to go contracting but waited for the next early retirement package. And they waited, and waited, and waited. It didnt come and they missing contracting income for nearly 2 years before finally jacking the dark side off.

[bobspud]

14 years sounds expensive from a redundancy point of view. My guess is that if you were at risk they would have found you by now. They are probably hoping you will go on your own. I would give up the hope of free cash and get on with using your mate to get you a role...

I knew several chaps that sat in BT begging for or expecting redundancy for years, while the managers said "nah don't want to give it to you out of spite... You can sit and rot on the bench." if they had jumped ship when they still had a real skill they would have made the cash back in a year.

[SimonMac]

Can't be arsed to read the whole thread but if you are on the bench I hope you are looking for contracts at immediate availability, if you are offered a contract just walk from your permie gig as I doubt they will put up a fight to lose you if they are paying you to do nothing and they save a redundancy package.

[Freamon]

You need some kind of savings or backup plan. Even though you have a contract lined up, there are no guarantees and you could be walked on day one, left with no income stream at all.

seriously how many permies have got zero savings?

In my experience, the vast majority of them. It's part of the permie mindset.

[MarillionFan]

Contractors here say just as bad things about permies, stop being so sensitive. He's making the point that he sees contractors who are not highly skilled, that's all. Hardly shocking news.

WHS.

Have you discussed redundancy with HR. There should be no reason that you couldn't ask.

Primarily though, find out what they would pay you for 14 years.
Then find out the possibility of being made redundant.
Then work out how much holiday owing you have and how much that's worth.
Then calculate all of the possible scenarios.

You then have the hard cash answer.

And then make a decision / play for whatever you want to do.

Good luck.

[kingcook]

The potential contract is verbal at the moment with meeting scheduled for tomorrow to get closer to formalising it (basically an ex-colleague is the one calling the shots & he wants me there so I'm pretty confident of the opportunity, he seems 100% confident).

If you're pining your hopes on this 1 contract alone, it may be best to just sit and wait for redundancy, and let this contract pass by.

If you're sure that more contracts will follow, then you have nothing to worry about. If not, then it will be a mistake to jump into contracting. What i'm trying to say is, it's only worth contracting if you can be reasonably sure you're going to get a good amount of work in the future.

This is just my way of thinking BTW

[psychocandy]

Paul,

Was in a similar situation and was lucky to get voluntary redundancy....

I was put on 'garden leave' initially and they paid me until they'd done all their other compulsory redundancy stuff and the process was all finalised as I think they had to by law. At this point then, they paid me TOIL and redundancy payment.

Only thing is during this garden leave they still reserve the right to call you back in. Probably wont happen but it could be a problem if you're on a contract at this time (and probably not really allowed).

Just check that this is not what their plan is because I'm sure they cant make anyone officially redundant until the end of the whole process.

Worked out ok for me in the end. The buggers did make me work for some of my garden leave, then I sorted myself a free course courtesy of welsh assembly government. In the end, spent about 2 weeks 'officially' jobless at the end of garden leave and then started current contract.

Best thing I ever did....

[SussexSeagull]

Some gotcha's here. Potentially if you do that you are also potentially going to have problems with IR35. It's not gauranteed but you will have to work harder to be treated like a business and not an employee if you were an employee less than 2 days ago if that makes sense.

Also some large companies have policies about taking employees back on. My last client had a policy of not taking anyone on that had worked there in the last 3 months. Oddly enough that suited them more, they got big redundancy payout (lots of long termers here) 3 months off and then back in. Crazy, but anyway....

I was more referring to the perilous status of contractors, but sound advice none the less.