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My colleague and I are both pregnant and are having to take voluntary redundancy in February after the 90 days consultation due to the fact that we will not be guaranteed part-time jobs when we return after our maternity. So, we’ve just had our meeting with HR to “finalise” things and they were hopeless. We are entitled to our redundancy package and a month in lieu, this is all fine, no dispute there. The company have agreed that due to the fact we are in the qualifing period they will have to pay us SMP BUT…. they want to pay it in a lump sum in February. Now our issue is that this will be heavily taxed and as it will be in this financial year, it will be calculated with this year’s earnings and we will not be able to claim the tax back. We spoke to the statutory dispute line who said paying SMP in a lump sum is frowned upon due to the tax implications and that the tax office did not like this to happen for exactly the reasons I have stated.
Also the company will pay in a lump sum and then what if we want or even need to go back to a part-time job after 6 months. As first-time mums we don’t know how we will feel….
The company is saying that by paying us SMP monthly would mean that we are still employed by the company until our SMP runs out, therefore would not pay us our redundancy payment until the SMP finishes, ie December 2010 and they say we would then have accrued more leave and technically more redundancy pay…ARGH.!!!
All we would like is for our redundancy to be paid in February and either our SMP monthly or paid in a lump sum in the new tax year, Why should we pay the tax when we probably won’t get it back??
I understand that you have volunteered for redundancy and your options are, in the main, as the company has set out to you:
If your employment terminates in February, on this date you will then receive payment of your statutory redundancy payment, your pay in lieu of notice and a lump sum in respect of your statutory maternity pay; or
If you receive statutory maternity pay on a monthly basis until your employment terminates next December, then you will remain an employee during this time.
The consequence of this is that the company does not have to pay your statutory redundancy payment until your employment then terminates i.e. potentially December 2010.
However, whilst you remain an employee, you then continue to accrue annual leave (and so would be entitled to accrued holiday pay on the termination of your employment) and longer service is likely to mean that you will then receive a higher statutory redundancy payment.
Another option for you to discuss with your employer is whether your employer would be prepared to agree that your employment terminates at the beginning of the next tax year, i.e. in April 2010.
You would receive your monthly statutory maternity pay up until this point and in April 2010 your employment could then be terminated and you would then receive the balance of your statutory maternity pay as a lump sum, plus your statutory redundancy payment and pay in lieu of notice, plus accrued holidays to this point.