I work for a small firm ran by an eccentric married couple, it is not very organised, for example none of the 11 employees have a contract - I have asked twice.All I do have is my original offer letter, which they gave me 3 months after I started.It stated that I was being offered a 6 month contract, on which my notice period after 3 months becomes 2 months notice.After 6 months they verbally asked me to stay full time and agreed that I am on 2 months notice. I asked for an updated contract/letter which I still don't have 5 months later.I am now in dispute with them regarding other matters and feel that I do not want to work here anymore or if the dispute continues they may decide to fire me.Please advise how I stand legally regarding the notice - I want to make sure they pay me the 2 months.thanksRob
Hello Rob,As agreed, your notice period is 2 months and you may either be asked to work this notice period or be paid in lieu of notice.You do not have an automatic right to be paid in lieu of notice.Hope this clarifies.
I'm glad that the two months apply. If they decide to ask me to go in lieu can I get that twx free?
Yes, you can get it tax free if they decide to pay you in lieu as the PILON (pay in lieu of notice) is not in your contract.You can get up to 30,000 pounds tax free.Hope this clarifies. Please take a few seconds to rate my answer
sorry, another one just to clarify;
I am on two months notice.
If I decide to resign I cannot just walk out otherwise I'll forfeit the 2 months, only they can decide if I go straight away or fulfill the notice?
I could get it tax free if I go in lieu and would also get paid for the month I've worked now and any holiday not taken?
Yes correct, you cannot walk out, it is for them to decide.Yes, you should be paid for the month worked and holiday outstanding but this will be taxed.
Hi, my colleague's answer has not explored a specific concept in employment law known as Auto-PILON, which could easily be applicable in your case and would mean that you cannot claim a tax-free PILON.Unfortunately, HMRC considers that some non-contractual PILONs may still be taxable under section 62 of the Income Tax (Earnings and Pensions) Act 2003. This will predominantly occur where the making of a PILON could be said to be an "automatic response to a termination".As an example, in the case of SCA Packaging Ltd v HMRC, the Revenue argued that, even if there was no contractual source for the PILONs paid to the employee, they should be taxable as emoluments, as the company had made such payments "as a matter of invariable practice".
Sorry, ran out of space so have to continue here:Finally, the issue with these is that each case must be looked at individually and the employer's past practices considered in great detail. However, the advice that you were given saying you can get it tax free just because it is not in your contract is dangerous and incorrect as HMRC has traditionally taken a hard line approach in such circumstances and great care must be taken to ensure you do not end up with a high tax liability in the future.Important: As professionals on this site, it is extremely important that our customers rate our service. This only takes a few seconds. I would therefore be grateful if you could please click to rate my service before continuing. If you feel the need to rate as one of the lower two scores, please reply to me via the REPLY or CONTINUE CONVERSATION button with any further questions you have. I will be happy to assist further and clarify anything you need me to. Thank you
I am sorry for the intervention above by a colleague. Please see this article which supports my answer: http://plus.indicator.co.uk/personnel/models/employment_documents/contracts_of_employment/pay_in_lieu_of_notice_clauseAlso, you have been incorrectly been led to believe that any tax liability will be on you the employee, it is not so, any tax liability would fall on your employers. Following the Privy Council case of Reda v Flag , HMRC appear to accept that it is rare for an implied term to become incorporated into a contract of employment by reason of custom and practice if it conflicts with an express obligation (e.g. an obligation to serve notice) in the contract and in your case, your employer is not a big company but a couple and it is unlikely that it has become custom and practice that they pay in lie of notice routinely. Hope this clarifies. 41082.508
Sorry I've just thought of another couple of things - can I still ask them now?
If I resign does it mean I cannot claim unemployment benefit?
Are there any other particular reasons that waiting to be fired is better than resigning?
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It does help yes, thanks.
on the potential issue of them firing me where do I stand?
I know that unless I have been here a year I have no rights in terms of unfair dismissal.
Presumably as the offer letter mentioned it being a 6 months contract the law would view me as being here only 5 months now as I have only been here a total of 11 months.
I completely disagree with them regarding our performance dispute, if they fire me over this reason how can I contest it? Or can't I?
Id be happy to rate the answer favourably, but when I go to do so it is asking me for further payments to do so.I'm happy to have paid for the answers I got but not again to give a rating for them.
That is fine, I will refer to customer services.All the best
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