When employment ends, confusion often arises over the differences between redundancy and settlement agreements. It’s crucial for employees and employers to understand both options and know that you’re never under pressure to say “yes” immediately.
What is Redundancy ?
A fair consultation and selection process
A statutory notice period
A redundancy payment based on your salary, age, and service length
What is a Settlement Agreement ?
It typically includes:
A negotiated financial package (often more than statutory redundancy)
Waiver of rights to bring claims (e.g for unfair dismissal or discrimination)
Extras like favourable references, confidentiality clauses, or outplacement support. Unlike redundancy, there’s no requirement for a formal process, it’s a mutual agreement that is only legally accepted if you receive independent legal advice
Myth-Busting & Tips for Negotiation
Whether you’re facing redundancy or being offered a settlement agreement, decisions about your employment shouldn’t be rushed or one-sided. Knowing your rights and options empowers you to navigate the process confidently.
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