Welcome to the forum Certiorari.

Statutory redundancy pay is a set legal minimum amount you must be paid which is based upon your weekly earnings, your age, and your length of service.

Holiday pay and lieu of notice would be different things.

Hi certiorari and welcome to the forum.

Are you subject to a Trust Deed, DAS or Sequestration at the moment?

Thank you for your replies. I have experience of sequestration and was wondering how a trustee in either a Trust Deed or sequestration would treat redundancy, particularly if the different elements of redundancy pay would be treated differently. I would have thought it reasonable for a debtor to be allowed to keep a proportion of the funds to meet their ongoing essential expenditure, regardless of whether it's from statutory redundancy pay, holiday pay or pay in lieu of notice?

Certainly Pay in Lieu of Notice and Holiday Pay are statutory entitlements too, so normally these funds should be able to be kept to go towards your household costs while out of work.
Having said that, it is basically income so if you are lucky enough to find another job quickly then your trustee could potentially seek a contribution from it.

When I was made redundant I only got to keep the statutory amount & paid over the PILON & holiday pay.

Perhaps the guidance needs to be clearer?

Hi certiorari,

The Accountant in Bankruptcy provides “Notes for Guidance” for Trustee’s under circumstances like this.

I’ve copied below the notes from their guidance in relation to “redundancy payment and other compensatory payments” under section 6.24.1. These notes for guidance can be found on the Accountant in Bankruptcy website under “Guidance” and then “Notes for Guidance”.

6.24 Redundancy payment and other compensatory payments

6.24.1 Redundancy - Where a debtor is made redundant and receives a severance payment from his employer, the question arises as to whether this payment, or part of it, vests in the trustee under Section 32(6) of the Act.

This question was considered in an application by Patrick McGrail under section 31(6) of the Act (Sheriff Murphy, Glasgow Sheriff Court, 10 August 1990). The sheriff did not issue a written judgement but The Accountant understands the facts of the case to be as follows.

During the relevant period, as defined by Section 32(10) of the Act, Mr McGrail was made redundant and received a severance payment of £5,050.

This sum was made up of four elements:

Statutory redundancy payment £ 810
Payment in lieu of notice £ 810
Company ex gratia payment £1,000
Additional payment based on years of service & wages £2,430
£5,050

The trustee conceded the payment in lieu of notice was income but claimed the remaining £4,240 as acquirenda.

This approach was later approved by the sheriff. The debtor disputed this approach and applied to the sheriff that this amount be excluded from vesting in the trustee, under Section 31(6) of the Act.

After hearing the solicitor for the debtor and for the trustee, the sheriff held that:

#61607;#61472;the statutory redundancy payment of £810 fell to be regarded as alimentary in nature and therefore as income which did not
vest in the trustee;

#61607;#61472;the other payments made by the company which were voluntary did vest in the trustee.

When dealing with payments made on redundancy, it will be necessary for trustees to identify that part which represents the debtor’s statutory entitlement and care will be required in those cases, such as McGrail, where it is company policy to pay an enhanced sum.

In some cases such an enhanced sum might be loosely termed the ‘redundancy payment’.

Once a debtor has received his statutory redundancy payment, the trustee should consider whether a contribution or increased contribution should be sought.

In this regard, the trustee should bear in mind that receipt of a redundancy payment does not immediately debar the debtor from receiving unemployment benefit under Section 20(3A) of the Social Security Act 1975.

Thanks David.