SETTLEMENT AGREEMENTS AND REDUNDANCY

SETTLEMENT AGREEMENTS AND REDUNDANCY

Covid-19 has presented a lot of challenges to all businesses and it is sadly inevitable that many employers will have to make redundancies.

The redundancy process has to be handled very carefully to make sure that it is fair and that it does not lead to claims in unfair dismissal or discrimination.  If you want to be sure that you will have no claims made against you arising from redundancies, you may want to think about the option of settlement agreements. In signing such an agreement, the employee is agreeing to accept the sum offered in the agreement and not to make a claim against the employer in the Employment Tribunal or Court.

In exchange for signing a settlement agreement, an employee can be offered a redundancy payment which is in excess of their statutory or contractual redundancy pay entitlement. This gives the employee an incentive to sign a settlement agreement and it means that the employer will not have to go through a consultation and selection process, which may be subject to challenge, and can take up a lot of valuable time and resources.

A settlement agreement can also be used to protect the reputation of the business, by including clauses which require employees to maintain confidentiality, and not to make any comments (including on social media) which could damage the business or its clients or other employees.

A settlement agreement can be attractive to both employers and employees as it provides certainty, and it means that the process can be much simpler, which saves time for both parties.

If you are thinking of making redundancies, and you would like to consider the option of settlement agreements, then please feel free to contact me, Elaine Walker, by e-mail at Elaine.Walker@mustoeshorter.co.uk or by phone on my direct dial number, which is 01305 752747. I can then advise you on your options and prepare settlement agreements which are tailored to your specific requirements.