Settlement Agreement for Redundancy

Redundancy can happen in any business and is an upsetting and difficult process for those faced with having to leave their job. It is usual nowadays for a business to offer an employee a Settlement Agreement either before, during or after a redundancy consultation process. At DSM Legal Solicitors, we have dealt with thousands of settlement agreements for both employees and employers. For employees we are on hand to guide you through the process and make sure you understand the legal issues you before you enter into a Settlement Agreement. For businesses, we provide the necessary legal advice alongside drafting a legally binding Settlement Agreement to ensure that you stay within the law.  

 

Redundancy can happen for a variety of reasons. A company may be going out of business or simply has to reduce its workforce due to restructuring. There could have been a merger which means some staff are no longer needed or the role a person was originally taken on for no longer exists. 

 

Most businesses use redundancy as a last resort. They’ll either try to accommodate employees in another role or suggest that they change, for example, their hours of work. 

 

If redundancy cannot be avoided and a company has to make redundancies, then there is a procedure to follow. This includes giving employees as much notice as possible and the chance to appeal if a decision is made to make an employee redundant.  

 

In order to qualify for a statutory redundancy payment an employee must have two years' continuous service. The amount of the redundancy payment is calculated according to a formula based on age, length of service and salary. Statutory Redundancy Calculator. 

 

Sometimes a company will offer an amount equal to or exceeding the statutory redundancy amount even if an employee has not been employed for two years.  

 

Settlement Agreements are often used to offer an enhance payment or compensation for loss of employment. A Settlement Agreement is a legal document where the employee is given an agreed severance payment in exchange for waiving their rights to bring a claim against the company. They are not just used in cases of redundancy but can be an important legal tool for any situation where an employee is dismissed or wishes to leave their employment. 

 

Apart from terms dealing with compensation other clauses might also be included, such as a condition that an employee will not apply or work for the same company or for a competitor for a set period of time. Non-disclosure or confidentiality clauses are routinely included.  

 

Settlement agreements need to be checked by an independent solicitor who will provide the necessary legal advice before signing the mandatory adviser's certificate. This is part of the process and the Settlement Agreement is not legally binding until this had been done and both parties have signed and dated the Settlement Agreement. Employers will almost always cover the cost of legal advice.  

 

At DSM Legal Solicitors, we regularly advise on Settlement Agreements. Once the work is complete we send our invoice direct to the Company. We are able to expedite Settlement Agreements if requiredand and it is not always necessary to attend our office in person – in most cases we can handle the entire process by telephone and email. If you are unhappy with the terms of the Settlement Agreement, we can negotiate with the Company. In most cases entering into a Settlement Agreement can be finalised quickly and at no cost ot an employee. Get in touch to find out more by calling 01925 937070 or email diane@dsmlegal.co.uk.