Redundancy can feel like a rug’s been pulled from under you — even when it’s expected. Whether you’re an employee being let go or an employer managing a restructure, a settlement agreement can make the process smoother, safer, and more respectful.
It’s a legal contract where the employee agrees not to pursue legal claims in exchange for a financial package or other benefits. It’s often used during redundancies to avoid disputes and provide clarity.
Employees – understanding your rights during redundancy
– Be treated fairly and consistently
– Receive a clear explanation of your redundancy
– Be offered a fair financial package
– Get independent legal advice before signing anything
How a settlement agreement can help you
– Secure a better exit deal
– Protect your reputation and future job prospects
– Avoid lengthy legal battles
Employers – how a settlement agreement protects your business
– Avoid tribunal claims
– Maintain confidentiality
– Ensure a clean break with no loose ends
– Show professionalism and care during difficult transitions
What to check for during redundancy and while creating a settlement agreement
– Is the redundancy genuine and fairly applied?
– Are the financial terms clear and reasonable?
– Have you received (or offered) legal advice?
– Are all post-employment obligations (like confidentiality) understood?
FAQs
Can I ask for more money in a settlement agreement? Yes — negotiation is common and often expected.
Is it compulsory to sign one? No — you’re not obliged to sign. That’s why legal advice is essential.
Can employers use them for performance issues too? Yes — they’re not just for redundancies.
This article was brought to you by Stuart Angel from our Canary Wharf office. You can book an appointment with Stuart using the form provided or you can reach him via email sangel@kiddrapinet.co.uk or by calling 020 7205 2115
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