Redundancy – part 2: Negotiating a better redundancy package
A series of case studies on executive redundancy
Jonathan is a senior manager in his 60s, married with grown-up kids. Although he can afford to retire, he doesn’t want to; pride is a significant factor. Jonathan suspects he is a target for retrenchment during an ongoing period of post-GFC ‘right sizing’.
He was approached by HR and asked to decide if he wants to stay or go (bearing in mind that he may not control the decision in the long run if deeper staff cuts are initiated across the board). Jonathan contacted Robert MacLean and together they reviewed his financials and made some changes so that his financial strategy would continue regardless of the outcome.
The key changes were to restructure his family super and investable assets, and to establish an estate plan. Robert sent Jonathan to an employment lawyer, as he had been put in performance management and offered three months salary to resign and go quietly.
After three months of negotiations, the employer agreed to pay six months salary on top of the three months of salary Jonathan received while the negotiations where in play. Robert negotiated with the HR department on Jonathan’s behalf to have the payout structured for best tax treatment.
In the long run, Jonathan was $60,000 better off, had more time to consider his next move and left the company with greater personal satisfaction – and his pride intact.