Settlement Agreements in Redundancy Situations

I’ve been offered a Settlement Agreement, but feel I’ve been unfairly singled out for redundancy… Just to explain, the offer of a Settlement Agreement is not an unusual action on the part of an employer in a redundancy situation. However, your rights under employment law ensure that whatever the situation is the correct legal process still needs to be followed. So, how you respond to the fact that a Settlement Agreement has been put in front of you very much depends on what is actually being offered. And there’s often room for negotiation.

Let’s have a look at a couple of scenarios…


1. You’ve been offered what you believe is a reasonable sum of money, and you’re also confident that you can walk into another position of employment that will pay you a similar salary.

In this situation, regardless of whether you feel you’ve been unfairly treated or not, it may make sense to accept what’s on offer; though you may look to perhaps tweaking a couple of points like requesting a reference. One has to remember that redundancy is stressful, and making a claim for unfair dismissal significantly more so. While it may be tempting to ‘get your own back’, in reality it might make more sense to accept a good offer and move on. It’s not defeatist, it’s pragmatic. You must get advice, however, from an employment law specialist experienced in dealing with Settlement Agreements to make sure that this is the case.

2. You’ve been offered little more than your statutory entitlement, which perhaps includes a small additional sum that equates to your notice period.

This is a far less attractive scenario, and may leave you without a job and no savings left to fall back on. So it’s worth assessing your situation very carefully. When considering employees for redundancy, an employer has to go through a reasonable and fair process. This often involves consultation, and may also include the assessment of appropriate personnel against a set of criteria. If this is not done in a fair way, and someone is singled out inappropriately, then it may be deemed that the process was a sham and the outcome predetermined. If this is the case, there could be grounds for you to claim unfair dismissal.


Claiming unfair dismissal…

Scenario B is a difficult and unpleasant situation to be in. For starters, to be able to claim unfair dismissal you have to have actually lost your job. And it’s a bold step to accept a below par Settlement Agreement offer in the hope of a successful employment tribunal outcome. An upheld unfair dismissal claim may end in you being given your job back, and that might not be what you want given the circumstances.

So it’s worth remembering that the first presentation of a Settlement Agreement offer from an employer isn’t the final word. It is acceptable to make a counter-proposal or negotiate improved terms. If your employer ‘secretly’ has concerns that you may make a legitimate claim for unfair dismissal, they may actually be open to improving their offer. This is where things get tactical, there’s no two ways about it. But with an experienced employment law specialist advising and working with you, you have a far better chance of securing a better outcome for yourself.


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