A settlement agreement means peace of mind for your employer, in knowing that you have given up your right to make a future claim against them. In return for signing, you receive an enhanced redundancy payment – that means more money for you. Woohoo!
There are various reasons why your employer might want to offer you a settlement agreement on redundancy. Here are a few of them.
Is your redundancy fair?
No matter how many people are being considered for redundancy, your employer has to run the process fairly.
This means they have to inform and consult all affected employees, explaining:
- Reasons for redundancy
- Alternatives to redundancy
- Criteria for selection
They must also offer you suitable alternative employment where possible, and give you the right to appeal against their decision to make you redundant.
If your employer is unsure whether or not their process is fair, they might offer you a settlement agreement with substantially enhanced compensation.
Is it a collective redundancy?
If there are more than 20 people being considered for redundancy, it can take your employer quite a long time to inform and consult everyone, as they have to explain the reasons for redundancy and explore alternatives as early as possible.
If they fail to inform and consult properly during a collective redundancy, they would have to pay you and your colleagues a penalty known as a ‘protected payment’.
Your employer might offer you a settlement agreement in return for waiving your rights to this protected payment. The benefit to them is that it helps speed the timetable. The benefit to you is that you receive more money.
Are you choosing voluntary redundancy?
If you have opted for voluntary redundancy, your employer might offer you an enhanced redundancy payment in return for you:
- Signing a settlement agreement
- Agreeing to keep your compensation payment confidential
- Accepting restrictive covenants such as not dealing with your former clients, suppliers or colleagues for a set period of time after leaving
P.S. A settlement agreement is known as a compromise agreement in Northern Ireland.
What this means to you
A settlement agreement must be scrutinised by an independent specialist lawyer (your employer will pay the fee).
We will advise whether the amount you have been offered is fair, and help you negotiate a better deal if it isn’t.
Need help?
For a FREE assessment of your claim, call 0808 168 7288 or fill in the contact form on the top right of this page.
We have already helped thousands of people to win millions of pounds in compensation.
You have a choice of ways to pay, including ‘no win, no fee’.
We will also discuss the best methods of funding your case and seek to reach a solution that best suits your needs. This can involve a “no-win, no-fee” agreement if appropriate.