If you have been offered voluntary redundancy, choosing whether or not to take it can be a difficult decision. Here are the facts you need about voluntary redundancy and Settlement Agreements, to help you reach the best conclusion for you.
What Is Voluntary Redundancy?
Voluntary redundancy is when your employer offers you a financial incentive in return for you agreeing to the termination of your employment contract. It differs from compulsory redundancy because there is no obligation for you to accept the terms – whether or not you are made redundant is entirely your choice.
Often, voluntary redundancy will come with a more lucrative financial incentive than standard redundancy pay would be, but this is not always the case.
Does Voluntary Redundancy Affect My Rights?
If you choose to accept voluntary redundancy, your rights will be exactly the same as those who are subject to compulsory redundancy. Voluntary redundancy is classed as a dismissal (rather than a resignation) under the Employment Rights Act 1996, and this means that your employer must:
- Consult with you individually and inform you of your rights
- Provide you with information about notice periods, financial incentives and any other relevant information
- Answer any questions you may have.
You will also retain your right to redundancy pay. It is important to note that if you are not properly consulted, your redundancy could be considered as unfair dismissal.
What Is A Settlement Agreement?
A Settlement Agreement is a contract between you and your employer, in which you are offered payment in exchange for not bringing an Employment Tribunal claim against the employer. Sometimes, you may be asked to sign one of these before you can proceed with voluntary redundancy.
Settlement Agreements can be used in place of voluntary redundancy. This can provide valuable certainty to both parties, by resolving disputes and allowing both the employer and employee to move on quickly without a drawn-out redundancy consultation process.
Settlement Agreements are not compulsory and you do not have to accept any terms that you are not comfortable with. It is absolutely possible to negotiate the terms of an agreement to find a solution that suits you.
If you have been asked to sign a Settlement Agreement, it is highly recommended that you seek legal advice first. An employment solicitor will be able to review the terms of the Agreement and ensure that it is fair. In fact, in order for the Agreement to be legally binding, the employee must have received legal advice.
Voluntary Redundancy And Settlement Agreements – Protecting Your Rights
When you are offered voluntary redundancy and/or a Settlement Agreement, it is natural to be unsure about the best way to proceed. Beeston Shenton’s experienced employment solicitors can help you. We have the knowledge to check any offers or contracts to ensure that they are fair for you, help you to understand any difficult terms, and undertake negotiations on your behalf.
Agreeing to either of these is a big decision, and it is important to make that decision with the best advice behind you. Situated in Newcastle-under-Lyme and with meeting rooms in Sandbach and Knutsford, Beeston Shenton are the local employment lawyers you need to help you. You can use our online form to contact us today.