An relative of mine with 7 years service in her job was made redundant immediately after the New Year via a phone call, with no notice or consultation at all.
Redundancy pay was paid correctly but no notice pay.
Assuming the employer can be persuaded to cough up the seven weeks statutory notice pay voluntarily, can anyone advise if it will be taxable/NIable as earned income or is it compensation for breach of contract and therefore tax/NI free? This has been a grey area in the past and I was wondering what the current thinking is.
Incidentally, I know there are lots of things about this situation which make an ET claim attractive, such as lack of consultation and statutory dismissal process (and the fact that the employee was probably selected for redundancy on the basis of being part time!). However the person involved doesn’t want the hassle of a case so the aim is to get as much cash as possible from the ex-employer without recourse to law.
Neil.
Neil Tonks
