Claimant v Lancastrian Estates (Preston) Limited
Outcome
Individual claims
The tribunal found the claimant was entitled to a statutory redundancy payment of £6,300. The respondent agreed this was the correct sum but had only paid £1,676.80. The tribunal awarded the outstanding balance of £4,623.20, rejecting the respondent's attempt to unilaterally reclassify notice pay as redundancy pay for tax purposes.
Facts
The claimant was made redundant and was entitled to a statutory redundancy payment of £6,300, which the respondent agreed was correct. The claimant was paid notice pay of £22,326.90. The respondent subsequently obtained a tax refund from HMRC by retrospectively reclassifying £6,300 of the notice pay as redundancy pay (which is tax-free), and paid the tax refund of £1,676.80 to the claimant. The respondent did not attend the hearing.
Decision
The tribunal awarded the claimant £4,623.20 in redundancy pay (the difference between the agreed £6,300 and the £1,676.80 already paid). The tribunal rejected the respondent's unilateral reclassification of notice pay as redundancy pay, finding that the claimant had brought a claim for redundancy pay and the respondent could not retrospectively change the nature of payments already made without the claimant's agreement.
Practical note
An employer cannot unilaterally reclassify payments already made to an employee for tax purposes without the employee's consent, even where doing so might be to the employee's financial advantage.
Award breakdown
Case details
- Case number
- 6003506/2025
- Decision date
- 10 June 2025
- Hearing type
- full merits
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- real estate
- Represented
- No
Claimant representation
- Represented
- No