Deferred Redundancy vs Settlement Agreement?

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am123
am123 Posts: 42 Forumite
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in Redundancy & redundancy planning
Hi all,

I am being made redundant due to my office closing down and services being centralised some 160 miles away.
I have been offered the chance to "defer" my redundancy by 6 months, but working from home as the office will no longer exist. Now HR are saying I need to sign a settlement agreement. I asked them to clarify whether it was deferred redundancy or a settlement agreement, as I was under the impression they were different things, but they said that deferred redundancies now have to be a "signed agreement".
Am I right in thinking there is something fishy going on here?!
I thought settlement agreements were more of a gagging order?

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  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    If they are offering a suitable alternative there is no redundancy till they decide that alternative is no longer an option.
  • am123
    am123 Posts: 42 Forumite
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    Hi, thanks.
    This isn’t a suitable alternative, they just want me to continue doing my job for a few months from home once my base has closed, to facilitate a smoother transition.
    I’m just confused as to why they are referring to it as a deferred redundancy, yet the agreement they want me to sign has a gagging clause and states that I cannot seek a claim once I am released. I’m not being offered anything other than the redundancy money I’m entitled to, so I’m struggling to see what benefit there is to me, bar a couple of months extra salary. ��
  • Paul_DNAP
    Paul_DNAP Posts: 751 Forumite
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    The "settlement agreement" is what you have to sign to agree the terms of your redundancy, and yes they often include a non-disclosure clause in there. The clause about not seeking a claim is purely there as a means to state you agree this is a full and final settlement of any and all business you have with them (e.g. any unpaid overtime needs to be discussed now and not after you leave). [This does not include your pension rights].

    You will have to sign one of those if you get made redundant, and one of the terms in the agreement is your last day of service. So all a "deferred redundancy" will mean is a difference in "You will leave the property today" and "you will leave in May" - but you're being asked to agree to that now and not in May.


    I can't see anything fishy.
    (Although I could be wrong, I often am.)
  • am123
    am123 Posts: 42 Forumite
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    Ok thank you. I was confused because other colleagues who have not had an extension have not had to sign any settlement, they’ve just been served their contractual notice and left on the given date.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    It is suitable alternative employment if they offer it an you accept

    There is no need for the settlement agreement.

    Negotiate better terms if they insist on one.

    If they need you then ask for more money.

    Make sure the redundancy is still paid if you resign early or they terminate earlier than the 6 months,

    You could add longer notice terms to protect a minimum payment period.
  • am123
    am123 Posts: 42 Forumite
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    Hmm interesting. They paint a very different picture, but I get where you're coming from. The agreement they have offered is that I will work until September 30th and then my contract will be terminated and I'll receive my redundancy payment. I don't see the need for a settlement agreement if what they are telling me is a deferred redundancy actually is - surely they'd just keep me employed and then issue my notice 12 weeks before 30th September?
    I should explain - I am public sector, so I don't believe there is any room for negotiation on payment. I have an appointment with a solicitor on Monday to talk this through.
    To be honest, I'm not sure I even want to stay for the extra few months. The whole process has been very draining and stretched out as it is. I just need to find out a bit more about the tax implications if I get another job before the end of the 2019 tax year. It's all very confusing :(
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    They can put you on notice now to end in September.

    Problem then is if you resign you could loose the redundancy.

    Any agreement needs to have exit early with redundancy.
  • vacheron
    vacheron Posts: 1,604 Forumite
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    If you don't see the extra few months salary as that much of an incentive to stay then why not just accept the immediate redundancy option.

    Clearly they feel it is in their interests to retain your services for the next few months. By refusing them this option you may see how much that value actually is!:)
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
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