Asked for Resignation Letter?

Thursday, June 18th, 2009 - career change, career management, career transition, contract negotiation, economics, Employer, Employment, Job Application, Legal, redundancy, regulation, tutorial

Asked for Resignation Letter?


Andrew, a skilled engineer, asks: I worked for a company for 4 years and was made redundant in a huge batch of redundancies. A couple of months later, the same company asked me to go back on a fixed term temporary contract. I’ve been back there 2 months and have been asked to resign as they now can’t afford to keep me on, and they say that it will look better on my CV if I resign rather than them terminating the contract early. I resigned as I wish I’d never gone back, but now I don’t know where I stand with claiming Job Seekers Allowance as I was advised/asked to resign?

In answer:
A number of issues here to resolve – think you might need legal advice and help:

  1. When you were made redundant, you were given a pay-off of redundancy pay. That came with tax breaks, in that the first £30,000 is not subject to income tax
  2. However, after a period of time of less than 12months, you returned to the same company albeit under different temporary contract terms. Any redundancy pay now could be subject to tax at normal rates, potentially having voided HMRC’s conditions for the tax break in the first place
  3. I don’t understand their “logic” of it looking better on your CV if you resign. Firstly you have to say/their reference will say that you resigned; secondly, as it was a fixed term temporary contract, they would have been liable for payment of the residual period of the contract, if they choose to terminate you
  4. You can’t claim JSA as you resigned. Until your savings fall below the required limits, or you are out of work for at least 6months, then nominally you can not claim JSA. I would check your individual circumstances with JobCentre+

Resignation Letter

I think there are two key issues to resolve:

  • The tax implications of taking redundancy, and then returning
  • The level of advice/force you were placed under by them to take the option of resigning

I would check with Citizens Advice Bureau on both issues initially. I think from reading the brief notes you have provided on the second issue, you would have a claim for payment of the residual period of your temporary contract, having been placed by your employer under undue duress.

Good Luck!

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