Starting anew after redundancy

Question

Good morning. I have just been made redundant. All was done by the book, however the company has no funds for severance. We are to get our Redundancy / Holiday and Notice period pay via National insurance fund in UK. My question is, I have been given 3 months notice period (as I worked for 18 years), but I have not been put on "gardening leave" and have not been paid in lieu (Pilon). My notice period money will come from HM Gov (National insurance fund) However, I am not able to apply for it until after notice period runs out (3 months). I have been told by various professionals that if I get a new job before notice period is over, then I will get penalised. Other professionals including Acas/Citizens advice have said that I ought to "sit out" the 3 month period before accepting offers! So I am getting conflicting answers. Any answers out there please? Fortunately I am able to "sit out" the next 3 months or so, so it's not a issue, but would like some clarification.

Answer 1

First, it doesn't matter when you accept a new job offer - what matters is when you start the new job. If you accept a job offer today to start in three months time, that is fine. So you absolutely can and should look for a new job right now, what counts is not the day when you sign a new contract, but the day when you start.

The RPS will pay you during the notice period with two limits: First, they only have to pay for the legally required notice period, not for the actual notice period. In your case, employed for 18 years, they will pay for the maximum of 12 weeks.

The other limit is £538 per week, with income tax and NI deducted. If your salary is more than £538 per week, you will only get £538.

If you don't make (much) more than £538 a week, you can sit it out if you prefer, but you can sign a new contract today or any time to start immediately after the notice period ends.

If you make more than £538 a week, you can start a new job at any time. The RPS will be happy because they can stop paying you, and you don't get the £538 per week, but you get paid for your new job. So you're not really penalised.

PS. If you make more than £538 a week and therefore lose money, the company owes you the difference. So you would be a creditor and might get some percentage of that debt, depending how much the company is worth.

Answer 2

Firstly very sorry to hear your news. Just want to clarify if the firm has been declared insolvent, if so the following article from gov.uk should be helpful (it also has details on how to check):

https://www.gov.uk/your-rights-if-your-employer-is-insolvent

If not then I would question whether you have any reason to continue working for a firm that is claiming not the have to pay you. Notice period is in a sense only legally binding as far as you have agreed to continue working via a contract. Having myself questioned it before with an employment lawyer (wanting to move on from a job quickly), they stated that you do not have to continue working for a firm during notice period, but in that case the firm are not obliged to continue paying you, and the only other fall out for you is they are not required to give you a reference.

To force someone to work without compensation is slavery and was outlawed in the UK in April 2010 (Anti-Slavery Day Bill). So if you do continue to work, do expect to be paid! If you haven't already done so, I would be getting my CV in order and be applying for roles ASAP. Whether you decide to continue to work for your current company should depend on how confident you are you will get paid for your work going forward.

Consider they are on the back foot and are not likely to have the time and resources to fight you over these details, but conversely they maybe also lacking in resource to compensate you.

Good luck!

edit

To expand and clarify, if the firm indeed has been declared insolvent, then my opinion is it would be work sticking it out, as there is the government safety net in place for your pay/redundancy. It shows dedication, and the ability to work through difficult situations to future employers. You will also be employed and earning while you are looking for your next role. All the best and take care.