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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.

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    I've always found the Citizens' Advice Bureau to give sound advice as it tends to come from employment lawyers. – Laconic Droid Aug 1 at 0:27
  • All these tell you the same ie wait out the three months - which one you quote tells you different? – Solar Mike Aug 1 at 6:37
  • Can't you call the HM Gov National Insurance fund and ask them? – Dan Aug 3 at 14:59
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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.

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  • And if your new employer really wants you to start early, you can always ask if they'll offer a signon bonus to compensate you for your lost gardening leave. – Dan Is Fiddling By Firelight Aug 1 at 15:51
  • It seems there was no gardening leave. On the other hand, the workload will probably be light. What can they do if they don't like your performance? Fire you? – gnasher729 Aug 1 at 17:56
  • What about the lump sum at the end of the notice period ? Do you still get that ? – GamerGypps Aug 3 at 13:17
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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.

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    While the now insolvent company obviously won't pay dubz, the Redundancy Payments Service will (up to a limit). – Philip Kendall Aug 1 at 9:53
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    Agreed, hence the link to the gov advice regarding insolvency. My answer is in the case they are not insolvent, just claiming to not have to pay... – Webdevuk Aug 1 at 9:59
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    From the question: "We are to get our Redundancy / Holiday and Notice period pay via National insurance fund in UK"; I'm assuming the "National Insurance fund" is actually the the RPS. – Philip Kendall Aug 1 at 10:13
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    I didn't want to assume, hence asking for clarification if the firm has been declared insolvent. Then elaborating on the scenario if they hadn't. The details on notice period still apply, if you are in a notice period you can not be forced to work against your will. Not completing your notice period you will forfeit your pay for that period and a reference, which is likely not to happen when the company is gone! It does sound very much like the company is insolvent, and there is still a choice to stick around to the end. – Webdevuk Aug 1 at 10:39
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    Good afternoon all, many thanks for the great answers. – dubz Aug 2 at 15:18

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