What does redundancy mean?
The legal definition of redundancy is as follows: –
- The employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was so employed
- The employer has ceased, or intends to cease, to carry on the business in the place where the employee was so employed
- The requirements of the business for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish
- The requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, have ceased or diminished or are expected to cease or diminish.
Posts that are declared redundant will be deleted from the Council’s establishment and will not be filled.
Is my redundancy payment pensionable?
Your redundancy payment is not pensionable, which means you will not pay pension contributions on it, and it will not affect the amount of pension which you receive.
Do I have to pay National Insurance on my redundancy payment?
No.
Do I have to pay Income Tax on my redundancy payment?
You do not pay tax on the first £30,000. Any redundancy payment over £30,000 is subject to Income Tax at the employee’s current tax rate. For example, if your redundancy pay is £33,000 then £3,000 will be taxed. Also, if the value of your redundancy payment together with the value of any compensatory added years to your pension exceeds £30,000, then you will only pay tax on the excess.
If I volunteer for redundancy and I am eligible to get my pension, will I get my pension lump sum as well?
Yes, if you were a contributing member of Strathclyde Pension Scheme before 1 April 2009, as any Pensionable Service accrued by you before this date will have accrued a lump sum payment as well as a pension.
*If you were a member of Strathclyde Pension Scheme on 6 April 2006 and your post is made redundant, you can access your pension from age 50. If you were not a member of the Local Government Pension Scheme on 6 April 2006 and your post is made redundant, you need to be aged 55 in order to access your pension.
Will I get 2 added years onto my pension and lump sum?
This is a Council discretion and will be applied to eligible employees volunteering for redundancy. To be eligible, you must have at least 5 years’ Strathclyde Pension Scheme membership and be under the age of 65. If you have 38 years or more service in the Local Government Pension Scheme, then added years will be granted up to 40 years scheme membership. For example, if you have 38 years 250 days membership in the pension scheme, you will receive an enhancement to your pensionable service of 1 year 115 days. Similarly, if you are aged 63 or more then added years will be granted up to age 65 so, for example, if you are 64 and 14 days on the date of redundancy you will receive an increase of 351 days to your pensionable service.
How do I know if I can access my pension at 50?
If you were a member of the Local Government Pension Scheme on 6 April 2006 and your post is made redundant, you can access your pension if you are aged 50 or older on the date of redundancy. If you were not a member of the Local Government Pension Scheme on 6 April 2006 and your post is made redundant, you need to be aged 55 on the date of redundancy in order to access your pension.
I am aged over 50 and not a member of the pension scheme, what am I entitled to?
You are eligible for an Enhanced Redundancy Payment, ie up to 66 weeks’ pay, subject to your age and length of service.
I am a contributing member of Strathclyde Pension Scheme but will not be aged 50/55 when I volunteer for redundancy – what will happen to my pension contributions?
The pension office will be advised of your redundancy you will become a deferred pensioner and will receive your occupational pension when you finally retire.
I have more than one post with the Council, if I express an interest in voluntary redundancy, would I be considered for redundancy in all of my posts?
No. You should submit a separate Expression of Interest (EOI) form for each post you hold. Submission of an EOI does not mean that VR will automatically be granted and is only a record of interest at this stage of the process.
I have a temporary contract with the Council – can I apply for voluntary redundancy?
In the main, yes you can apply, however only employees with at least 2 years’ continuous service at the date of redundancy will be eligible for a redundancy payment.
I have flexibly retired and have not re-joined the pension scheme – will I be eligible for a redundancy payment?
If you have flexibly retired, irrespective of whether you have re-joined the pension scheme or not, you will be eligible for a redundancy payment based on the statutory table, ie up to 30 weeks’ pay, subject to your length of service.
Why are there two different calculations for redundancy payments?
There are two different calculations for redundancy payments because the Council offers two different packages depending upon age and membership of the pension scheme.
Employees who can access their pension will receive a redundancy payment based on the statutory redundancy tables as well as access to their pension and, in most cases, an enhancement to their pensionable service. Employees who cannot access pension benefits, or who do not contribute to the pension scheme, will receive an enhanced redundancy payment. You can find the redundancy payment calculators on the Hub.
Is the process confidential?
Yes, in so much as the process will be handled confidentially by a dedicated team in Improvement and HR. Your Executive Director and Head of Service will be advised of your application. Your Executive Director is likely to consult with your Head of Service and your manager before making a final decision about your application.
Will I receive any payment in lieu of notice?
No, you will be expected to work your notice period.
Will I be paid for any holidays that I am not able to take before my leaving date?
You will be expected to take your holidays prior to leaving. Please note if you leave part way through the year then your holiday entitlement will be pro rata to the number of complete months which you work and therefore may require to be recalculated.
I have set contracted hours but regularly work beyond those hours each week. How will my redundancy pay be calculated?
Your redundancy payment will be calculated based on average earnings over 12 weeks.
If I accept voluntary redundancy, can I apply for a post with the Council in the future?
If you accept voluntary redundancy, the Council will not normally re-employ an employee who accepted a voluntary severance package within 12 months of leaving. It is recognised, however, given the geography of Argyll and Bute, that there may be exceptions to this restriction. Any proposal to re-employ a former employee who has been made voluntarily redundant must be approved by the relevant Executive Director.
I have 2 posts with the Council and pay pension for both posts. If I am offered voluntary redundancy for one of my posts, what happens to the pension for the other post?
You will remain in the pension scheme in relation to your other post and continue to accrue pensionable service in this particular post.
Please check if the following conditions apply to you:
- You have more than one post with the Council
- you are aged between 50 and 55 and you were in the pension scheme on 6 April 2006
- One of your posts is redundant
then you are eligible to access your pension and likely to receive, after you leave, a substantial tax charge on both the lump sum and pension payments.
Will the Council provide financial advice with regard to my pension/redundancy payment?
The Council will not provide financial advice. It is up to you to seek your own advice. However, if you are a member of a trade union, you may wish to contact your trade union representative who will be able to check if the trade union has contact details for financial advisors.
I am on secondment and have been told that my substantive post is at risk of redundancy. What happens now?
Your line manager from your substantive (non-seconded) post will involve you in any consultation discussions regarding your role. If your substantive post is identified for redundancy, you will receive formal notice of redundancy. You may continue in your seconded role until its scheduled end date. Following this, you will either be redeployed to a suitable alternative position or receive redundancy pay (which will be calculated based on your substantive post and the date it officially ended).
However, only employees with at least 2 years’ continuous service at the date of redundancy will be eligible for a redundancy payment.
I am on a career break and have been told that my substantive post is at risk of redundancy. What happens now?
Your Line Manager will include you in consultation discussions about your post and follow the appropriate processes as outlined in the redundancy, selection or redeployment procedures.
I am on maternity leave and have been told that my substantive post is at risk of redundancy. What happens now?
Your Line Manager will include you in consultation discussions about your post and follow the appropriate processes as outlined in the redundancy, selection or redeployment procedures.
Further information in relation to Redundancy can be found on My Council Works, here: Redundancy Policy and Procedures