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Settlement agreement

Discussion in 'Workplace dilemmas' started by Daveh1981, Jul 1, 2019.

  1. Daveh1981

    Daveh1981 New commenter

    Morning everyone

    I'm currently on long term sick with WRS & am now starting down the settlement agreement route. I feel better as I now see light at the end of the tunnel.

    HR said they would give me PILON up till December. Union said I could ask for statutory redundancy but that the school could withdraw the agreement if I ask for too much? I've no job lined up & I've taught for 15 years. I've no idea what to do. Anyone have any advice or support?

  2. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Union are best placed to advise you, we don't know your full circumstances or the school's. Do not rely on advice given on here.

    However, if you are on standard teacher's contract notice periods [National Conditions of Service for School Teachers, aka the 'Burgundy Book'] then offering you PILON until 31st December isn't offering you any more than you would get if they simply dismissed you for sickness capability, or if you returned to work in September and then gave your notice in. So not exactly a generous offer from the school.

    On another thread someone reported that their union had told them PILON payments were (partly) tax free but this is no longer true. Rules changed April 2018. In general all PILON payments are now taxed and NI'd the same as if you continued working during the notice period.


    I would have thought that your union should negotiate something over and above PILON but I've no idea how strong your negotiating position is. Could you have a legal claim against them, for example, which you give up your right to pursue in exchange for SA? You might be able to negotiate a sum for redundancy (and the first £30,000 of redundancy pay is usually tax free), but it has to be genuine redundancy, employers can't dress something up as redundancy to avoid tax if it isn't really redundancy. HMRC will challenge payments schools make which purport to be for redundancy but aren't.

    Yes the school could withdraw the SA offer if they are unwilling to pay what you ask - that's a negotiating truism - but the skill of the union negotiator should be to work out the maximum they can get the school to pay and secure it for you.
    Last edited: Jul 1, 2019
    Lara mfl 05 likes this.
  3. Marshall

    Marshall Star commenter

    Can you clarify what PILON is please?
  4. marlin

    marlin Star commenter

    Payment in lieu of notice I assume Marshall.


    PILON is a payment made to an employee when employment is terminated without notice, instead of the employee working through a notice period and receiving pay in the normal way. It is different from 'gardening leave', in which the employee is still in employment during the notice period and is paid during that period, even though he or she is not present at work.
  5. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Pay in Lieu of Notice.

    When the employer agrees to end your contract now without you having to work out a notice period but pays you now a lump sum equivalent to what you would have earned if you had continued to be employed until the end of your notice period.

    It used to be that a PILON lump sum was taxed at less than if you had worked out your notice, but since April 2018 there is no difference in the tax and NI.
    Lara mfl 05 likes this.
  6. grumpydogwoman

    grumpydogwoman Star commenter

    Be aware that PILON is now subject to tax. It wasn't for a long time but the HMRC have tightened up.

    Why on earth isn't the union advising you on a redundancy package and an appropriate figure???
    mothorchid likes this.
  7. Rott Weiler

    Rott Weiler Star commenter Forum guide

    On reflection it may be more generous than that, I'd overlooked that you have already been off "long term". So you may have exhausted your sick pay, in which case PILON until December, 6 months pay, could be fairly generous. It depends on (a) what your sick pay status is now, and (b) whether you would be likely to return to work on full pay before December.
  8. Daveh1981

    Daveh1981 New commenter

    Thanks for advice everyone - I can't put into words how useful I'm finding this community. This has been the worst period of my life but I'm starting to feel more positive. So a genuine thanks :)

    I raised with my union that I would be receiving the same as if I handed in notice in September/was dismissed through ill health capability....they replied 'oh yeah, hadn't thought of that!'

    ...so I've withdrawn from any negotiations & I'm looking to hand my notice in September.

    Re sick pay - I'm still on full pay until November then onto half pay. Union have advised that notice pay will be at full salary so I'm not to worry. Is this correct?
  9. Torey

    Torey Occasional commenter

    The difference is that with a settlement agreement you could negotiate a reference. This would make it easier for you to get another job. If not they could either choose not to write one (meaning you won’t teach again) or say that you were dismissed due to ill health (making it more difficult to find another job). The union are giving you bad advice if they are just thinking about the financial impact in the short term.
  10. grumpydogwoman

    grumpydogwoman Star commenter

    So the union thinks that you could remain off sick (with the agreement of your GP, of course) until November on full pay? That sounds right. You'd then return to work on full pay until the end of December. Also correct.

    But, were your ill-health to continue and you remained off work, you would go to half-pay after November.

    Moreover @Torey is quite right. Without a settlement agreement the school could exercise their right not to provide any form of reference for you and thus scupper your chances with any subsequent employer. They could indeed give you an indifferent reference if they felt they had grounds that could be substantiated or could provide a reference so lack-lustre it did you no favours.

    Wise words from @Torey
  11. Rott Weiler

    Rott Weiler Star commenter Forum guide

    This does not sound correct. If you envisage staying off sick until December 31st then from November until December 31st you will only receive half pay.

    I believe your union rep has misunderstood paragraph 6.1 of the Burgundy Book. That says that you will get full pay during your notice period if the school gives you notice, ie if the school dismisses you. But not if it is the teacher who gives notice, so it wouldn't apply to you.

    6. Termination of employment during a period of sick leave

    6.1 In the event of a teacher exhausting in part or full his/her entitlements under paragraph 2.1 above and being given notice of the termination of his/her contract without returning to work on the ground of permanent incapacity or for some other reason related to the sickness absence, he/she shall be paid full salary for the notice period with normal deductions only.
  12. grumpydogwoman

    grumpydogwoman Star commenter

    Quite so.

    If your unbroken period of being off work continues beyond November? You'll go to half-pay.
    Lara mfl 05 likes this.
  13. mothorchid

    mothorchid Star commenter

    Wiser heads than mine have given helpful advice. I just wanted to send sympathy to you; this is a painful place for you to be in. Good luck.
  14. notreallyme75

    notreallyme75 Occasional commenter

    Anyone in situations like this find it’s a time you really find out who your friends are and what the difference is between really good friends you meet at work and work colleagues?
    tenpast7 and Daveh1981 like this.
  15. Daveh1981

    Daveh1981 New commenter

    Thanks everyone. It's quite a mess isn't it. I think the union are doing their best but they seem really busy.

    School initially advised that I would receive a good reference & that an agreed one wouldn't reflect how positively they thought of me. That may all change if I continue to be unwell though.

    I won't be returning to teaching and will just look for something in the new year to pay the bills until I'm ready to work full time again.

    School have said if I don't accept their offer then they will dismiss me due to ill health in September. Union said this would at least give me my pension contributions up until December as well as full notice pay.
  16. Rott Weiler

    Rott Weiler Star commenter Forum guide

    As linked earlier, if the school dismisses you for ill health capability that is correct, but not (as I'd understood you to mean earlier) if you resigned.
  17. grumpydogwoman

    grumpydogwoman Star commenter

    Ok, but be warned. It can be very awkward if they decline to give you a reference. Even in jobs outside teaching. Or in the voluntary sector. I know. I retired but needed work a few years later. Nobody remains at my last school and they simply won't even give me a reference to confirm I worked there from 2006 to 2013. Not even that!

    It's not the end of the world but it could have been. Have an eye to the future and the long-term.
    agathamorse likes this.
  18. Piranha

    Piranha Star commenter

    Putting together the comments about sick pay during the notice period, there is a difference between you handing in your notice and the school giving you notice, in that if the latter happens, you will get full pay until 31 December. If the school is right in thinking you can be fairly dismissed on health grounds, then full pay until the end of December sounds like the most you can get, so their offer looks reasonable to me. If you accept PILON, you will no longer be employed there, and can therefore start looking for another job more easily.

    Provided that a decent reference can be negotiated, the settlement offer sounds like a good way to get out of this situation. In which case, getting it sorted soon would be good. The school is more likely to agree on the reference if they see you to be cooperating. Of course, union advice on whether you could do better is needed; I suspect not but that is just my own guesswork.
  19. grumpydogwoman

    grumpydogwoman Star commenter

    So you're relaxed about the prospect of being dismissed on health grounds?

    From what I've heard a settlement agreement sounds preferable. More controllable. But we don't know the whole story and you mustn't divulge too much information for fear of revealing your identity.
  20. Daveh1981

    Daveh1981 New commenter

    I'm not relaxed about any of this. It's a complete mess. I have no idea of the right thing to do.

    All I know is that I wish I hadn't taken on HoD a few years ago as it took me away from teaching.

    Thanks for input everyone - I'll just have to see how things go & hope for the best.

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