Negotiating a redundancy settlement agreement
How to negotiate settlement agreements and redundancy packages in the UK — ACAS and GOV.UK, no invented figures.
Employers often offer settlement agreements with enhanced redundancy pay. Negotiate reference, notice and waiver scope — not just the lump sum. See ACAS and require independent legal advice for binding waivers.
Prepare your case
List accrued holiday, bonus, commission and potential unfair dismissal angles.
Use GOV.UK statutory redundancy calculator as a floor, not a ceiling.
Set internal minimum and target.
Beyond the payment
Agreed reference wording before signing.
Garden leave or pay in lieu of notice.
Restrictive covenants: narrow scope or extra pay.
Benefits and tax
Report redundancy pay to DWP per current rules.
First £30,000 may be tax-free for qualifying payments — confirm HMRC guidance.
Payment timing affects cashflow and UC.
Legal review mandatory
Settlement agreements need independent solicitor sign-off to be binding.
Check confidentiality, non-disparagement and clawback clauses.
Do not sign same day without advice.