Instead of being made redundant, can I negotiate a Settlement Agreement with my Employer?

Aug 3, 2022

There may be an opportunity, if your employer is looking to make redundancies, to negotiate a settlement agreement.

This is an agreement made by both parties without being constricted to using the rules around redundancy. These rules can be cumbersome and time consuming for an employer so they could be very receptive to discussing a settlement agreement with you.

You would then be in a position to negotiate a favourable financial settlement to possibly include an agreed reference to take with you, which you could then be provided to future prospective employers.

Settlement agreements are also subject to rules though, so it is important to understand what these are and what should be included in your settlement agreement. 

Both you and your employer must agree to it, therefore if you approach your employer with the idea of a settlement agreement and they do not want to discuss the idea, there is nothing you can do. In those circumstances you would need to continue in the redundancy process.

However if your employer is happy to explore the idea of a settlement agreement, they will draft one and then have to pay for you to receive independent legal advice regarding the settlement. It will also clearly state that you cannot take them to an employment tribunal and will specify exactly which claims are excluded.

Asking your employer whether a settlement agreement would be considered is worth doing but ensure that you get advice from a specialist employment solicitor.

For advice about a settlement agreement, or any other employment law issue, contact us on 01264 353411 or email

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