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Redundancy - Q&A

Last updated 14th October 2002

new or updated - new or updated item since last revision.

Questions specific to the ICL redundancy programme are available here as a Word document (updated 02/02/02)

Additional info:

General redundancy questions:

  1. What different redundancy schemes are there in ICL?
  2. How do I know if I'm getting what I'm entitled to?
  3. What's included in salary for redundancy payments?
  4. Which bits of my redundancy package are taxable?
  5. What is compensation for loss of benefits?
  6. Will I be required to work my notice?
  7. What holidays do I get paid for?
  8. What happens if I don't get a job?
  9. What can I do if I want to challenge my redundancy/selection for redeployment to Linkwise?
  10. I don't work at West Gorton, and MSF isn't recognised here - can the union help me?
  11. What counts towards my final pensionable pay?
  12. How was I selected?
  13. If I lose my job I will not be able to afford my union contributions.
  14. I've been offered a redeployment, but I'm not sure if that job's suitable. What safeguards are there?
  15. Can I get time off to look for a new job or attend interviews?
  16. newEffect of Early Retirement Pension on 5.1 Payments

What different redundancy schemes are there in ICL?
The Security of Employment Agreement (SEA) covers most staff. There is also a Management grade package, which also applies to some people who signed new contracts when they entered professional communities. Ex-SORBUS staff transfered into ICL with their own package (which isn't very good!). We also understand that some people have been put on statutory minimum redundancy packages - which is a real set-back. The scheme that applies to you is that which is stated in your contract.

How do I know if I'm getting what I'm entitled to?
Check the facts for yourself. Ask your manager, HR or Linkwise manager for details of the scheme under which your payments will be calculated. Does this agree with your contract and your colleagues? Talk over what you've been told with your union rep.

What's included in salary for redundancy payments?
You basic pay is included, as is any shift premium, and any regular scheduled Telephone StandBy payments. Overtime is NOT included unless you have to work it under your contract.

Which bits of my redundancy package are taxable?
Your redundancy payment itself is tax-free up to £30,000. ICL say that two parts of your total payment are taxable - any "Pay In Lieu Of Notice" (PILON), and any compensation for loss of benefits. In the past staff aged 50 and over, who are taking early retirement, have been able to transfer parts of your payment over £30,000 into the pension fund to avoid some tax. Staff under 50 are advised to seek financial advice as regards using some of the redundancy monies to purchase AVCs thus avoiding the tax on that part of the redundancy payments in excess of £30K. The amount of money you can use to do this is however limited. See also the answer to question 14 about when the notice period goes beyond the financial year end.

What is compensation for loss of benefits?
For your pension, and if you receive other benefits, such as a company car, or medical cover, you should be paid these up to the end of your notice period. The company tend now to offer a settlement where they pay PILON based solely on the salary component of your remuneration and allow you to leave without working your notice. Unless your contract includes a clause stating that the company can do this then they cannot without your agreement. For staff on long notice periods this can have a considerable effect on their final pensions as the length of service will finish on the day you leave the company. This will be either at the end of your notice period if you "work it" or at the start if you take PILON. The quotation marks are there because it should be quite possible to negotiate with the company to work the notice as "Garden Leave" whereby for all intents and purposes you are employed but never actually attend work.

Will I be required to work my notice?
It is a long-standing practice that people at risk of redundancy are not required to work their notice. The only exception to this is for people entitled to 12 months notice, where they have often been asked to work for 6 months. For staff in Linkwise however the only job they have is to be looking for a job, so there should be no real requirement for them to work their notice if it has already been decided that this will prove pointless and hence the redundancy.
In recent times ICL have altered new contracts to include a clause that allows the company at their discretion to replace notice with PILON which pays only the salary component of your remuneration, i.e. no benefits.

What holidays do I get paid for?
You should be paid for any holidays you would have earned by the end of your notice period, even if you aren't required to work your notice. In addition, employees whose service started before August 1991 are entitled to an extra 13-weeks-worth of holiday entitlement (e.g. someone with 30 days per year gets 7.5 days) because of changes to the annual leave year. Staff covered by the SEA have a MINIMUM holiday entitlement of 10 days regardless of when the redundancy occurs during the year.

What happens if I don't get a job?
If you're covered by the SEA, you are entitled to claim "5.1 payments" if you don't find work. These payments won't be made automatically - you have to claim them. Make sure you've got a copy of the SEA and that you sign-on etc.

What can I do if I want to challenge my redundancy/selection for redeployment to Linkwise?
MSF has (unfortunately) a lot of experience in ICL redundancies - the company has not always handled these properly, and you may have a case. Contact your rep immediately for advice and help. Get talking as soon as possible, and keep a diary, and copies of any correspondence. Staff wishing to challenge their selection for redeployment to Linkwise should get a grievance in before the transfer takes place.

I don't work at West Gorton, and MSF isn't recognised here - can the union help me?
YES - Your employer must by law allow you to be represented by your union in any disciplinary or grievance meeting. Not all local managers are aware of this - if you have a problem - call your rep.

What counts towards my final pensionable pay?
Your "pensionable pay" is defined as "Your basic pay, i.e. pay for the hours you are contracted to work on a regular basis." If you have regular shifts, TSB etc, this should count. We are seeking clarification from the pension fund on this definition.

How was I selected?
You have a right to see your selection criteria. They should be objective, fair and consistent.

If I lose my job I will not be able to afford my union contributions.
The union subs can be waived for members in long term unemployment.

I've been offered a redeployment, but I'm not sure if the job's suitable. What safeguards are there?
At MAN05 there is the Security of Employment Agreement between the union and ICL which gives a 6 month trial period for staff who are redeployed to avoid redundancy in which to decide if the job is suitable. If during that period you decide that the job is not for you, you are entitled to take redundancy on the same terms as applied when you undertook the redeployment. For staff on other sites not covered by any agreements there is a statutory trial period of 4 weeks.

Can I get time off to look for a new job or attend interviews?
Employees under notice of redundancy have legal rights to paid time off to seek work or attend job interviews, providing they have at least 2 years service with the employer. The amount of time off has to be "reasonable" in the particular circumstances. There's no fixed amount of time off which employers should give, however the maximum an employer can be required to pay is 40% of weekly earnings.

Effect of Early Retirement Pension on 5.1 Payments
5.1 payments (Special Supplement for Continuing Unemployment) will be reduced if you have elected to take an early pension. This is because of the note in the SEA which states "Account will be taken of any early retirement benefits paid when calculating supplementary benefits." This is far from definitive as it doesn't state how account will be taken, and was written when the company was in fact giving early retirement benefits in enhanced pensions. It could be argued that early pensions are not a benefit as they are reduced because they are taken early and the net effect should be cost neutral to the pension fund. However the practice has been established and this is detailed in the company document "Information for Employees Leaving through Redundancy." Section 3.6, which states:-
"Payment represents 75% of basic weekly salary minus:
  1. any State Benefits to which you are entitled, and
  2. if you have elected to take an immediate pension, any pre commutation occupational pension."
In other words, if you have taken an early pension and taken a lump sum from the pension fund so reducing your pension, the sum used in the above calculation will be the amount you would have been receiving had you not taken out the lump sum.

If you have Questions (or Answers) that would add to this Q&A, please email Rep .

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