Redundancy Settlement Negotiation
The client is experiencing a potential redundancy situation while on maternity leave due to a restructuring in their department. They have a call scheduled to discuss a settlement package with their employer. The client has three months' notice periods, accrued holiday days for the current year, and aims to negotiate for additional accrued holiday days in the following year. Furthermore, they are looking for an extra month of full salary, compensation for unused KIT days, and wish to minimize tax on the settlement. The client is open to negotiations.
Questions about this case
These answers have been verified by a lawyer in the LEAP networkWhat are the tax implications of receiving a redundancy package while on maternity leave, and how can I minimise the tax burden?
Redundancy payments up to a certain threshold are typically tax-free, but amounts exceeding this limit are subject to income tax. Payments for accrued holidays and payment in lieu of notice are usually taxable as they are treated as earnings. To minimize tax, you could negotiate for additional non-taxable benefits, like extended health benefits or outplacement services. Utilizing the tax-free portion of the redundancy and spreading payments across tax years could also help reduce the immediate tax burden. For detailed tax implications, consult your local tax guidelines or speak to a financial advisor.
Can I negotiate for additional compensation beyond statutory redundancy pay, particularly due to accrued holiday and remaining KIT days?
Yes, you can negotiate for additional compensation beyond statutory redundancy pay, particularly given your unique circumstances. You can request payment for accrued holiday days and negotiate for more in the following year. Additionally, you can seek compensation for unused KIT days and potentially negotiate an extra month of full salary as part of the settlement. Presenting your case effectively is essential, emphasizing your accrued entitlements and the impact of the redundancy during maternity leave.
Are there any legal protections or entitlements I should be aware of when negotiating a redundancy package while on maternity leave?
While on maternity leave, specific regulations protect you under employment law. You are entitled to statutory redundancy pay if you have been employed for the requisite period, and your maternity leave should not negatively impact your redundancy terms. Employers are also required to consider any alternative roles before making your position redundant.
How does the timing of my redundancy during maternity leave affect my rights and any potential claims I might have?
The timing of your redundancy during maternity leave provides you with specific protections under employment law. You should not be made redundant solely because you are on maternity leave. You have the right to be considered for suitable alternative vacancies if your role is genuinely redundant.
What are the best strategies to present my case effectively during the call with the company regarding the settlement package?
Focus on presenting a clear and structured argument during your call. Start by outlining your situation, highlighting your accrued entitlements. Emphasize the impact of redundancy during maternity leave. Clearly express your desired outcomes, using supporting data to strengthen your negotiation position. Remain open to dialogue and be prepared to compromise.
