Problems on ex-gratia portion of redundancy payment.

A few years back I was outsourced to a company and told that everything was covered by TUPE except pensions. When we wanted to negotiate redundancy they said that it would be illegal to put any redundancy terms into our contract. Years later they onsourced employees and put (less favourable) redundancy terms into their contracts. Now I'm being let go and though I have 20 years service (11 with old company and 9 with new) they are capping my ex-gracia portion at 4 wks x 10 yrs. I know that they don't have to give anything at all but this is an in-profit multi national corp and I feel that under TUPE they should adhere to the original customs & pratice of the older company. Could I take a case to the employment tribunal on something like this do you think?

I would certainly look at bringing this to a solicitor for a view. Under TUPE your service should have continued; meaning what ever date you started in the company should be you start date for redundancy purposes. I assume the statutory portion of your redundancy is based on full service?

Hi Deas, thanks for the quick response. The statutory portion is "safe" and I will get that, my problem is that they are capping the years for the ex-gratia portion. I know that this payment is at the discretion of the employer but they are acting very unfairly by capping the years. Does anyone belive that I could take a case to the tribunal and win?

Thanks for the clarification. I'm afraid that the ex-gratia is just that; i.e. they don't have to pay it. While it appears unfair, once they are doing this for all in the same boat as yourself, it is actually fair. They could have changed the terms to something like '4 weeks per year to max 1 year's salary' or the likes which they could have fixed to pay out the same. Given that they are paying 10 years, and not 9, it is not impacted by TUPE. In reality you are getting weeks per year for 10 years of your service which is quite good.

I would still get advice on this. I know people will say that this is an ex-gratia payment, totally at the discretion of the employer, but it should still be fair. Why should an employee with 20 years service, receive recognition for only 10 years, especially when the original company would not have implemented these less fair conditions. You would have had reasonable grounds to believe at the time of transitioning to the new company that by staying on and working for the new company that you would receive this recognition. I think the employment tribunal could have a similar opinion on this. I wouldn't accept any redundancy deal without seeking advice first.

I'm afraid redundancy as a term of employment would not be covered under TUPE if not contractual so commercial reality enters into any offer that would be made. By all means get advice; but don't leave yourself in a situation where the ex-gratia portion is withdrawn because you have not signed up to it.

I know someone who was being let go with only statutory. This person had many years service and felt that the company, whose parent company was large and profitable and had paid an ex gratia payment in the past, and that this was being unfair. The case went to the employment tribunal and the person was awarded 6 weeks for every year. I think the point is that this payment is not truly at the employer's discretion. The company in this case was forced to pay. eRayZure, feel free to pm me and I can give you more details and the name of the solicitor that dealt with the above case.

Just to clarify the legal position - if you claim under Redundancy Payments Acts from the Tribunal, they can only award the statutory redundancy entitlement. The OP has said he will receive that. Unless it is contractual, any ex gratia amount is at the absolute discretion of the employer. The other route is a claim for Unfair Dismissal under unfair Dismissals legislation where the Tribunal can make an award that is higher than the statutory redundancy amount. They will take into account whatever money you have already received when deciding on an award. I suspect that Wonderwomans friend made a claim for unfair dismissal not redundancy and was awarded a sum which amounts to 6 weeks per year of service (pys). Maybe you could check the specifics Wonderwoman?

A redundancy can be judged an unfair dismissal if (1) it is contrived, i.e. there is no redundancy situation (2) the dismissal was not wholly or mainly as a result of the redundancy (3) selection was unfair (3) the employer acted unreasonably in relation to the dismissal for example that reasonable procedures were not followed (4) any suitable alternative work was not offered
Assuming that (1) and (2) & (4) are not grounds here, then the OP would be making a case under (3). His only dispute seems to be that although he is getting an ex gratia payment it is not as large as his expectation. I think it may be hard to convince a Tribunal on that without some kind of established agreement being in place.

Thanks Greenfield, what you said makes sense. I will check the details with my friend and let the OP know the specifics.

eRayZure, would any of the 4 points as listed by greenfields be applicable in your case?

Hi guys, thanks so much for this advice. To answer the last post: no none of the above apply to me, however I still think by the company putting these terms into my contract without my permission and at odds with what was paid in the past - it just sucks and is unfair! Of course what you say Greenfield & Wonderwoman makes sense and is very helpful to me, but do you see any other way I can challenge what they are going to do?

Challenge in the legal sense? I'm afaid I don't think so if you don't see a case under unfair dismissals or transfer of undertakings. If the firm was strongly unionised you could take an industrial relations case and ask the Labour Court for their opinion. However the employer can basically ignore the Court unless the union has the muscle to force the employer into honouring any recommendation. Aside from that, as Deas has already said, they can withdraw the existing offer of ex gratia so it may be that the reality for you is that you will have to accept the package.