Redundancy

I am about to be made redundant after 22 years. The company is offering 6 weeks (includes statutory 2) but is capped at 1.5years salary. Therefore it is no where near a 6 weeks package. This is part of a restructure within the company. Is there any way A)I can get them to lift the cap or increase it. B) Get the company to pay the tax so I get an actual 1.5 years salary into my hand. c) What happens with my company pension, can I still pay into it. D) I feel the cap is a poor reflection on solid service particularly as the company is profitable. They are planning for the future as part of a worldwide cost cutting to remain so E) How should I invest this money or how can I maximise the amount and keep from going going tax. F) ANY ADVISE WELCOME AND INDEED LOOKED FOR

Sorry to hear about your situation.

Is there any way A)I can get them to lift the cap or increase it.

Click to expand...

I don't think so - they are only obliged to provide statutory redundancy so anything above that is at their discretion. Is there a union or other joint bargaining entity (committee) who might be able to negotiate on your (and others') behalf?

B) Get the company to pay the tax so I get an actual 1.5 years salary into my hand.

Click to expand...

I'm not sure but I doubt it. Sounds dodgy.

c) What happens with my company pension, can I still pay into it.

Click to expand...

Is it a defined contribution or defined benefit pension? Usually when one leaves an employer (voluntarily or otherwise) one is given several options in relation to the accumulated occupational pension fund including (a) leave it invested as a paid up plan (b) transfer it to a standalone pension buy out bond (c) transfer it to another company's occupational scheme (d) take a refund of your own personal contributions after deduction of tax (the latter usually only applies for people who have only served a few years in the scheme so is probably not relevant to you). Normally you cannot continue to contribute to the scheme one you have left the job. However you could put in place your own pension arrangements such as a lump sum or regular payments personal pension plan or a PRSA. You should probably talk to your employer's pension scheme consultants or the trustees to be appraised of your options (should be notified to you in writing) and maybe get independent professional advice of your own. Perhaps you could negotiate with your employer to provide such independent advice to you at their expense?

D) I feel the cap is a poor reflection on solid service particularly as the company is profitable. They are planning for the future as part of a worldwide cost cutting to remain so

Click to expand...

Sounds like it all right.

E) How should I invest this money or how can I maximise the amount and keep from going going tax

Click to expand...

That is a very difficult question to answer. As I mentioned above you may need to get professional independent advice on this as it depends on many issues - e.g. how much pension savings you already have, whether they're defined contribution or defined benefit, what options are available to you on the pension scheme, how long you have to retirement etc. You may get some tips here but there is no substitute for comprehensive professional independent advice in cases such as this. It would most likely be a relatively small amount of money well spent.

F) ANY ADVISE WELCOME AND INDEED LOOKED FOR

Click to expand...

Perhaps you could also negotiate with your employer for non monetary benefits on redundancy such as pension advice (above), outplacement support (e.g. time, resources, training for getting alternative employment) and so on?

Here are some other links that might be of interest to you:




www.entemp.ie/
[broken link removed]

Good luck.

Sorry hear your situation,

There should be an appeals process around your redundancy with the company which you could make your agrument over the 1 and a half year cut off, I believe the most you can receive in a redundancy payment is max two years salary. If the Company haven't already provided you with the redundancy broken down into a tax worksheet, get them to so you know exactly where you stand.

Definitely look at their appeals process speak to the HR Manager see if they can advise you.

I believe the most you can receive in a redundancy payment is max two years salary.

Click to expand...

Are you sure about that? I never heard of such a limitation. Perhaps you mean the max you can get tax free is two years?

OASIS has a bit on "collective redundancies" which require group consultation/negotiation in case that's of any relevance in this situation:

I'm afraid the company is well within their rights to cap the amount they actually pay. They are only obliged to pay statutary. I never heard of any max. figure on this though.

The CAP.......

Rings, like other sorry to read about your situation - it's a difficult thing to happen after such long service. A couple of points from my experience in such situations a) the mentioned that the max that can be paid is 2 years is INCORRECT - I have seen situations where this level has been breached (but it does tend to be at the most senior levels and when a company really wants a problem to just go away!). b) there may be good reason (from the company's viewpoint) to have a cap for negotiating reasons eg. If the company wants to layoff say 20 people and they put aside say 500k for the exercise... normally the unions want a floor (say minumum payment of 10k per head even if someone only has 12 months service. By introducing the cap the company can be seen to facilitate people with low service and nobody really feels sorry for the long term guys who appear to be walking away withn loads of money. I have been involved from the employers side in these issues and I know unions tend to take that view (but not in public!).

Finally one argument I have heard in favour of the cap is that someone with say 22 years experience has had the benefit their salary over a long period and their potential loss of earnngs is not as great as someone in their mid twenties - this supports the argument for the floor and ergo the cap.

I'm not saying this is my own opinion but it reminds me that when it comes to group redundancies everyone has a vested interest and everyone is trying to put their own spin on the rational to maximise their cut (sounds just like the Cabinet...).

Finally, could you get the company to put a large chunk or all of your redundancy into a your pension. That would be very tax efficienta dn you could probably get access to a bond when you are 50.

Anyway - best of luck and hopefully you'll be in a new career early in 2004.

MAC