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In February 2021, new data from the Centre for Retail Research (CRR) revealed that 850 retail jobs had been lost every working day since the beginning of the year. More than a thousand high street stores are set to close so far; Debenhams, the oldest retailer in the UK, recent collapse tops the list when it announced on 1st December 2020 that it was going into liquidation. 
Whilst BooHoo is set to purchase Debenhams’ ecommerce operations – BooHoo is an online retailer – the physical stores are no longer required. The company recently announced that all their stores across the UK would start to close from 2nd May, with all stock clearance and final closures completed by 15th May 2021. This will result in as many as 12,000 staff losing their jobs; with this comes redundancy employee settlement agreements. 
What is a redundancy settlement agreement? 
Previously known as compromise agreements, redundancy settlement agreements are often used by employers in situations where employees are losing their jobs due to company closures, restructures and mergers. 
It is an agreement between the employer and the employee that in return for a greater statutory and/or contractual entitlement, the employee agrees not to take any action against the company in the future, such as an unfair dismissal claim. However, accepting a redundancy settlement agreement is totally voluntary; you do not have to accept it but it’s likely you will still lose your job. 
What to consider with a redundancy settlement agreement? 
A redundancy settlement agreement is legally binding and as such, you must always get the advice from an independent solicitor regarding the terms of the agreement. The aspects to consider include: 
● The date the enhanced payment(s) will be made and by what method 
● Any conditions regarding the receipt of payment, such as withdrawing any claims 
● The employment termination date. 
Make sure the enhanced settlement payment includes: 
● Your outstanding salary 
● Any outstanding holiday, if any, that would have been accrued during a notice period 
● Any outstanding car allowance 
● Any outstanding payments like expenses, commission payments and bonuses 
● Payment in lieu of notice period 
● Any compensation payment in respect of injury to feelings, defamation or the removal of restrictive/confidentiality restrictions 
● Any outstanding maternity/paternity/adoption payments. 
The redundancy settlement agreement should also incorporate details about any company benefits, such as company car, corporate health insurance or pension. In most cases, the enhanced payment is subject to tax, which is usually deducted at source before you receive your payment. It is also recommended that a reference is agreed in advance with the employer and attached to the settlement agreement. 
If you have been offered a redundancy settlement agreement and are looking for independent legal advice, contact us at DSM Legal. Our experts in settlement agreements are ready to advise and guide you every step of the way. We also handle a wide variety of accident and serious injury claims at work, including spinal cord injuries, slips, trips and falls. We work on a ‘no win, no fee’ basis, ensuring the entire legal process is risk-free, and will not cost you anything if you lose. Contact us today to see how we can help with your claim. 
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