Redundancy Pay

Published on August 9, 2010 by Crawfords Accounting

After the closure of a school which affected 600 children, a new company was established to look continue their education. Staff who had also been employed as part of the original school tried to claim redundancy pay. They asserted that they were entitled to this money from the Redundancy Payments Service.

The case was taken to court and the judge ruled that because the teachers’ jobs were simply transferred from one company to another their original jobs were therefore ‘preserved’ making them ineligible for any redundancy pay and not entitled to any notice period.

However, one employee did receive money from the Redundancy Payments Service as there was reason to believe that she may put forward a claim to the Employment Tribunal.

Alex Kachani – partner at Crawfords – explained that “this case illustrates a change in the law regarding employees’ rights. Where directors of failed companies have previously failed to claim from the Redundancy Payments Service, it seems those that were on the payroll might now succeed.”

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