Sudden redundancy - settlement offered but can we angle for more?

Cobbler_tone

Hoenir said:

Cobbler_tone said:

Something is slightly out of the ordinary as for a
redundancy you wouldn’t involve a solicitor.

Normally redundancy doesn't require your signature on a legally binding agreement. Once signed. There's no second bite of the cherry.  Agreements can also contain clauses relating to being employed by competitors or relationship's with customers.  The dangling carrot is large for a purpose.  There's method behind the generosity. 

Precisely, which is why being 'offered redundancy' is maybe not the best term. 
Makes me wonder what the alternative option is if he declines their kind 'offer'.
Considering he is "blindsided and reeling" it wasn't on the cards in his world.

However 'generous' their offer is, he could ask for more (PILON, paid up hols if not already) but at the very least I hope that he fully understands the context behind their decision. You clearly can only outline so much info but presumably his performance is OK and he has no protected characteristics? With the info supplied, they want legal sign off I would assume that it is all above board because that is what a decent solicitor would check. There are lots of solicitors who deal in this area. You will get one who works on a fixed fee for that amount or less. My OH just used a local one for VS and it was funded by her org for £380+ VAT.

Grumpy_chap

Hoenir said:

Cobbler_tone said:

Something is slightly out of the ordinary as for a
redundancy you wouldn’t involve a solicitor.

Normally redundancy doesn't require your signature on a legally binding agreement. 

Often it does when there is an enhanced redundancy package.

The employer can follow all the proper process, consultation etc.  

The employer can pay out at statutory minimum redundancy (unless contract requires more).

The employer can do whatever they like and offer an enhanced redundancy package that exceeds statutory and contractual obligations.  This will be accompanied with a "Settlement Agreement".  In return for the enhanced payout, the employee signs away options to pursue unfair dismissal or any other claims against the employer.

The rules for "Settlement Agreements" require that the employer pays for the employee to have independent legal advice before signing.

The sort of factors that will be checked and might be part of a negotiation would be:
 - Is the payment being offered at or above statutory?
 - Is the payment being offered at or above any contractual obligations?
 - Is the payment being offered correctly calculated?
 - Has notice period been correctly assessed and the correct number of years served calculated?  For example, say an individual has 14 years service but, by the end of the notice period would have been 15 years.  The redundancy should be calculated on 15 years and not 14 years.
 - Has proper consideration of whole salary been assessed in the payment calculation?  For example, value of a company car or pension contributions allowed for?
 - Agree that any recoveries by the employer might be waived - for example pay-back of past training.
 - Consider whether the payment is being made in the most tax efficient manner.  For example, if the amount exceeds the £30k that can be received without incurring income tax liability, would redundancy sacrifice to pension be a better outcome?
 - Simply a "cheeky" push for more.  This might simply be asking for more money but might be better if structured as an "invisible" outcome such as pay for some retraining.

The wisdom of asking for more or negotiating needs to be assessed in the round.  The employer can simply withdraw the offer and revert to statutory.  If requesting more, having that presented in a structured and reasoned way by a Solicitor can be better received than simply the employee asking for more.

Cobbler_tone

We have significantly enhanced redundancy terms….and don’t use solicitors. If we want to get rid of someone on the other hand…

Grumpy_chap

Here is the ACAS overview of Settlement Agreements and (page 17) it states that the employee must receive legal advice.

https://www.acas.org.uk/sites/default/files/2021-03/settlement-agreements.pdf

Cobbler_tone

Grumpy_chap said:

Here is the ACAS overview of Settlement Agreements and (page 17) it states that the employee must receive legal advice.

https://www.acas.org.uk/sites/default/files/2021-03/settlement-agreements.pdf

Exactly, a compromise agreement as opposed to a redundancy.

Grumpy_chap

Cobbler_tone said:

Exactly, a compromise agreement as opposed to a redundancy.

It is not uncommon to have both.

If an employer is offering redundancy with an enhanced redundancy over and above statutory (or contract) obligations, what is the employer gaining in return for that enhancement?

Obviously, a nice warm feeling inside for doing the best they can in a challenging situation - we all know that business works that way 

Oh, and security that the employee will not make any claim some time down the line.  That has a real value to the employer and warrants the enhanced redundancy payment.

If the employee is not agreeable to the Settlement Agreement, then there is nothing for the employer to gain by simply making statutory redundancy payments and taking their chances if the employee seeks to claim further along the road.

vacheron

This could be because they are in a real hurry for some reason, or they want to reduce staff, but their reason fitting the definition of "redndancy" is weak. 

If they are in a hurry, does his offer figure include PILON (Payment in Lieu of Noice), as he would be entitled to at least 12 weeks notice if he has been employed for 15 years anyway. Make sure that this isn't included as part of the "enhancement" as he would be paid this anyway if he worked his notice out. 

Hoenir

Cobbler_tone said:

We have significantly enhanced redundancy terms….and don’t use solicitors. If we want to get rid of someone on the other hand…

Senior Management have better things to do with their time than get embroiled in protracted one to one negotiations. 

Cobbler_tone

Hoenir said:

Cobbler_tone said:

We have significantly enhanced redundancy terms….and don’t use solicitors. If we want to get rid of someone on the other hand…

Senior Management have better things to do with their time than get embroiled in protracted one to one negotiations. 

Yeah, they normally 'disappear' but remain on the system for 3-6 months. Not disappear literally BTW, we aren't that ruthless.