Redundancy and settlement agreements

Julian cole portrait.

Julian Cole

Senior Solicitor

Phone 01264 353411


The furlough scheme has done its bit to limit job losses over the last few months, but the changing economic scene is now presenting a harsh reality for businesses and workforces. Many employers are looking to scale-back their operations, and pretty quickly. It means redundancies are on the cards.

If you find yourself facing redundancy, it’s really important to understand your rights. There is a process that your employer must go through, which includes talking to you about possible ways of keeping you on – in a different role in the organisation or under a different type of arrangement, perhaps.

You should also understand what you would be entitled to if made redundant. Employees who have worked for their employer for at least two years should usually get statutory redundancy pay, and may be entitled to contractual redundancy pay on top of that. You should also get any holiday pay that you are owed and, unless you will be working your notice period, notice pay. Those are the basics; your individual circumstances may entitle you to more.

What is a settlement agreement?

Your employer will probably ask you to sign a settlement agreement that sets out the amounts it will pay you. You will need independent legal advice on that agreement in order for it to be enforceable. That’s largely because, as well as spelling out the things you stand to gain from your redundancy, your employer will be asking you to sign away your right to bring certain claims. Having a lawyer on your side ensures you know exactly what the settlement agreement would mean for you.

You could ask your lawyer to check you’re getting everything you are entitled to, and he or she may be able to help you get a better deal. If you have a potential sex discrimination claim against your employer, for example, your solicitor may be able to negotiate a bigger payout from your employer in return for you agreeing not to pursue that claim. They may also be able to advise you on the tax implications of the deal your employer has proposed, as well as issues around shares, bonuses and pensions. And your solicitor could help you agree with your employer the wording of a reference and an announcement to colleagues about your departure. The scope of the advice you’re looking for would be for you to agree with your solicitor at the outset. Employers usually contribute towards the cost of legal advice.

Sadly, we have seen the number of enquiries about redundancy rise significantly in recent weeks. But as part of that, we have helped many employees break away from their employers on terms that stand to help them move on from their redundancy with some confidence.

To talk to us about redundancy, or for specific advice on your settlement agreement, please get in touch by contacting Julian Cole on 01264 353411 or email We will be happy to help.

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