Settlement agreements and redundancy

If your employer offers you a settlement agreement or you are facing redundancy, the choices you make matter.

We explain what every part of the agreement means, check the figures, and negotiate on your behalf so you know exactly what you are signing and achieve the best deal available to you.

Speak to an experienced employment solicitor today

What is a settlement agreement?

A settlement agreement is a written, legally binding contract that records the terms on which employment ends.

In return for an agreed payment, you normally give up the right to bring certain employment tribunal or court claims.

The agreement can also record other terms such as the content of any future reference.

For a settlement agreement to be valid it must meet specific legal requirements.

It must be in writing, identify the adviser who gave independent advice, and state that the statutory safeguards have been met.

The agreement will not be valid unless you have received advice from an appropriate independent adviser.

You should be given a reasonable time to consider a settlement offer.

As a rule, ACAS recommends at least 10 calendar days to consider the formal written terms and to obtain independent advice.

Employers commonly offer to meet or contribute to your legal fees, but there is no absolute legal requirement that they do so.

We will advise whether the employer’s offer on fees is reasonable and, if not, seek to negotiate an improved contribution.

How we help with settlement agreements

We know that handling settlement agreements can be a source of stress, so we offer to:

Read the agreement line by line and explain each clause.
Check whether the payment is reasonable given your likely tribunal remedies.
Negotiate a better financial package, a neutral reference, or flexibility on post-termination restrictions if required.
Provide the required independent legal advice and confirm our professional indemnity cover.
Prepare the signed declaration you need to make the agreement effective.

We aim to protect your position and limit future risk while achieving a sensible outcome now.

Redundancy: your rights and what to expect

Redundancy is potentially a fair reason for dismissal when the employer no longer needs the role, for example because of new technology, reduced workload, business closure, or relocation.

Employers must follow a fair procedure and apply objective selection criteria.

Failure to do so can lead to claims for unfair dismissal or discrimination.

If you have at least two years’ continuous service, you are usually entitled to statutory redundancy pay.

The amount depends on your age, weekly pay, and length of service.

There are statutory limits on weekly pay used for the calculation and on total entitlement. For practical calculations we will check the current caps and run the numbers for you. If you are offered an enhanced redundancy package, you will usually be required to enter into a settlement agreement.

If you are facing redundancy, we can:

Review the selection process
Advise on whether the procedure is fair
Negotiate improved exit terms,
Check redundancy pay calculations
Bring tribunal claims where appropriate

When to act urgently

You have been given a settlement agreement to sign
Your employer has started a redundancy selection and you think the process is unfair
You suspect discrimination is linked to the redundancy or dismissal

Early legal advice protects time limits and gives us the best chance of improving your position.

Protect your rights with trusted support from our expert legal team.

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