employment tribunal solicitor | unfair dismissal | constructive dismissal | age discrimination | disability discrimination
race discrimination | sex discrimination | workplace bullying | sham redundancy | settlement agreement



If your employer informs you that your services are no longer required or offers a “settlement agreement” due to a workforce reduction, you have a right to seek legal advice before either agreeing to or signing the agreement. Even if the business you are employed by is no longer solvent, there are Government provisions for redundancy pay for employees who have worked there for at least two years. Your weekly salary, age and length of employment are all considered in calculating compensation which does have a statutory financial cap. The foregoing only applies if the redundancy situation is genuine and not a sham because many employers remove staff under the guise of redundancy because its usually cheaper than the compensation ordered payable by the Employment Tribunal as a result of unfair dismissal.

It’s important to note that redundancy pay and any ex gratia amount offered may be tax free up to £30,000 dependent on the circumstances of the offer. Any settlement agreement should to carefully constructed to minimize the tax burden. The formula used to determine Redundancy pay is:-

Sham Redundancy

In some cases an employer may try to make an unfair dismissal look like a redundancy so that he can pay less. If you believe that the redundancy situation is a sham it is vital that you receive legal advice immediately. Do not discuss the details of the alleged sham redundancy with co-workers or your employer until you have talked to a solicitor. It is important that you get legal advice regarding requests for reinstatement or compensation for possible unfair dismissal at the first possible opportunity. Know your rights, ask a professional. Call the helpline or send us an email.

Alternate Employment

What if your position is no longer required due to restructuring at your company because of economic conditions? Your employer may offer you another position within the organisation. If taking that position would “cause a serious disruption in your life,” you may decline without loss of benefits. If you decide to resign rather than take the position, you will remain eligible for redundancy compensation.

Settlement Agreement

If your employer offers you a “settlement agreement”, shortly before receipt of your redundancy pay you may be interested in considering it because of enhanced payment terms that are usually offered in exchange for undertakings to take no other legal action in the future or to keep trade secrets confidential. You are required by law to seek legal advice prior to signing any settlement agreement and in most cases the employer will pay the legal fees for that advice. Your employer wants to ensure that all details of the termination are concluded however a solicitor who is not happy with the provisions may want to renegotiate the terms.