Redundancy & Employee loan

[Kholoshian]

Hi all,

I had an employee loan from my employer that was set to run for 3 years. I was made redundant in Sept 2020 and after the consultancy period, the company said that whatever redundancy pay i would receive would have to be used to repay the balance of a loan the company had provided.

 

I had paid more than half of the loan (via monthly salary deduction). I refused saying my redundancy and the loan were separate matters. The company conceded and paid my redundancy.

 

They have now written to me to say I have to repay the balance in full. I have no contract (only a letter) with regards to the loan and my understanding is that as they (by making me redundant) had removed my ability to service the loan and therefore voided the agreement. I had no choice in the matter.

 

Can anyone shed any light on the legal standing as I can't find anything specific. 

 

Many thanks

M

[dx100uk]

might help?

 

Industrial Training Bond debt collection advice - Debt Collection Agencies - Consumer Action Group

[Kholoshian]

Hi DX,

Many thanks for looking this one out for me. I've read through it and I'm in a different situation by my way of thinking.

 

I'm aware of companies recouping such things as training losses when a employee 'chooses' to leave before a stipulated period and I can understand this. But my situation was pressed upon me by way of enforced redundancy.

 

Would it perhaps help if I posted the only 'agreement' I am in possession of..ie a letter. There were no clauses in my employment contract to explain what would be expected should redundancy be applied. In point of fact I didn't even have an employment contract until 3 years into the role (don't ask!).

 

from a contractual aspect the employer really has nothing in the way of terms to rely on. I guess I'm going to just have to wait and see but I generally like to act first and not leave things to chance. Hence the fact finding on this excellent resource forum.

 

Any other advice from you as a seasoned campaigner on my next best move? It would be much appreciated. 

[Manxman in exile]

What were the terms of the loan?  How long did you have to repay it?  Did it say anything about what would happen if you ceased to be employed by them?

 

6 hours ago, Kholoshian said:

... and my understanding is that as they (by making me redundant) had removed my ability to service the loan and therefore voided the agreement. 

 

I don't think so.  And if it was "voided" (as opposed to written off - which is probably what you meant) they could claim all the outstanding monies straight away - which I suspect you don't want.

 

Post up a copy of the letter if that is all you in the way of terms for the loan.  (Blank out anything identifying you and your employer).

[Kholoshian]

Hi Manxman, 

Thanks for your reply.

 

I'll be honest I'm not sure if it's voidable or unenforceable or what term is appropriate. 

 

In my case, my employee loan was enforceable whilst i remained in the employ of the company and it was serviced by way of salary deduction - quite standard. However, as the enforced redundancy removed my ability to service the loan by way of the agreed method (salary deductions) and there were no terms in the agreement to say what would happen should the company make me redundant - I take that to mean it would no longer be enforceable.

I'm not saying i'm right - but it seems inequitable that they can now say 'pay the balance' after putting me in a situation where i couldn't pay.  

 

I'll dig out the pdf copy of the letter that was sent to me. If I can't edit the pdf and blank out the identifying stuff, I'll just post the body of the text.

 

Many thanks for your time in looking at this. 

 

 

[dx100uk]

convert to jpg 1st

read upload

 

dx

[Kholoshian]

OK DX  will give that a go

 

Its a bit messy...there was alot to cover. Anyway, thats all I have.

 

 

1620939027446.pdf

[theberengersniper]

I'd have thought the crux of the matter is the line:

 

"should you leave the employment of the company at any time then the outstanding balance at that time would need to be immediately settled."

 

You are leaving the company, just not by your own choice. I wouldn't have thought your method of leaving actually came into it, but I'm the farthest from an expert you'll find so...

[dx100uk]

can i just check.

is this the actual company thats written or some fleecing DCA ?

 

 

[Kholoshian]

It's the actual company...no DC involved as yet.

[Kholoshian]

12 minutes ago, theberengersniper said:

 

You are leaving the company, just not by your own choice.

Exactly, 'leaving' suggests choice. I had no choice.

[Emmzzi]

It's enforceable. Source: have enforced similar.

 

 Choice is irrelevant; you're still leaving.

Edited May 14, 2021 by Emmzzi

[Manxman in exile]

17 hours ago, Kholoshian said:

However, as the enforced redundancy removed my ability to service the loan by way of the agreed method (salary deductions) and there were no terms in the agreement to say what would happen should the company make me redundant - I take that to mean it would no longer be enforceable.

 

No.  You are completely wrong I'm afraid.  It's repayable now.

 

The best you can do is try to negotiate a repayment plan.

Edited May 14, 2021 by Manxman in exile