News Article

Settlement Agreement for Redundancy

02May

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. Making sure that you get a reasonable settlement is, of course, important. At DSM Legal, we have the expert teams on hand to guide you through the process and make sure you understand the legal issues you are being faced with. For businesses, we can also provide legal advice and support to ensure you stay within the law when arranging redundancies. 

Redundancy can happen for a variety of reasons. Your company may be going out of business or simply has to reduce the workforce because times are difficult. 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 your company has to let you go, then they legally have to follow a set procedure. That includes giving employees as much notice as possible and the chance to appeal the decision. There also needs to be a settlement agreement in place and an appropriate redundancy package put together.

If you have been employed for more than two years, the minimum you should expect is a statutory redundancy payment. settlement agreement legal advice

For businesses who need to make staff redundant, making sure all the procedures are followed correctly is vital – failure to get this right can mean that you are opening yourself to a potential unfair dismissal claim. This can cost a significant amount of money, particularly if the employee wins their case.

This is where settlement agreements come in. This is a legal document where the employee is given an agreed redundancy payment on condition that they do not bring a claim against the company. Settlement agreements are not just used in cases of redundancy but can be an important legal tool for any situation where an employee is dismissed. Other clauses might be included in an agreement including that the employee will not apply or work for the same company for a set period time in the future. A non-disclosure clause might also be introduced.

Settlement agreements need to be checked independently by your own solicitor if you have been offered redundancy. This is part of the process and the redundancy cannot be agreed until this has been undertaken. Your employer will normally cover the cost of this.

At DSM Legal, we can deal with your settlement agreement and invoice your employer directly. This needs to be done as soon as possible once the agreement has been produced. You do not have to attend our office in person – in most cases we can handle the issue both on the phone and via email. If you are not happy with the settlement agreement, we can also negotiate with your employer concerning the terms. In most cases, however, this is a simple process and we can send the signed copy of your agreement to your employer the same day in the first-class mail. Get in touch to find out more.