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In this article Chris Hadrill, the partner in the employment team at Redmans, gives his top ten tips on negotiating a higher redundancy payout

  1. Set out your objectives
  2. Check your contract of employment
  3. Check your employer’s redundancy policies
  4. Decide your negotiating strategy
  5. (Almost) always seek to negotiate the financial values
  6. Be clear and polite when negotiating
  7. Take good notes of meetings
  8. Do your research
  9. Talk to colleagues
  10. Talk to a solicitor

Set out your objectives

Think carefully about what you’re looking to achieve from the negotiations – are you looking to maximize the financial payout, get a better reference, or just leave the organisation as soon as possible? These decisions will guide the way in which you approach the negotiations and how aggressively you wish to negotiate (as well as a variety of other factors). For the purposes of this article I will assume that your main objective in the settlement agreement negotiations is to increase the redundancy payout.

Check your contract of employment

Find a copy of your contract of employment and review it before starting the negotiations – your contract of employment will almost always contain clauses that will affect the terms of the settlement agreement, including: notice pay clauses, confidentiality clauses, intellectual property clauses, and post-termination restrictions (which may, for example, restrict your ability to join a new business after your employment terminates). Forewarned is definitely forearmed in these circumstances, as you may wish to address the relevant clauses in the settlement agreement negotiations.


Check your employer’s redundancy policies

Check whether your employer operates, or has operated, an enhanced redundancy policy. Obtain a copy of the policy, if it is available in writing, and, if you can, speak to your (former) colleagues to see how the redundancy policy was operated in these circumstances (be careful, though, as you may be in breach of confidentiality obligations under your settlement agreement (or your colleagues’/former colleagues’ agreements)) if you discuss the terms of the settlement agreements)).

Decide your negotiating strategy

Once you have decided what your objectives in the negotiations are, decide how you are going to approach negotiating your redundancy payout/settlement agreement – generally, you have the following options:

  • Negotiate the agreement yourself; or, if you have instructed a legal adviser to represent you
  • Instruct your legal adviser to negotiate the settlement agreement on your behalf

In deciding which approach to take, consider how good your ‘political’ connections at your employer are, how much leverage you have, and whether you are able to talk direct to the ‘decision maker’ in the process – if so, it may be best for you to negotiate directly with your employer (whilst, of course, taking the appropriate legal advice); an added benefit of this approach is that it will also help to keep your legal costs as low as possible.

(Almost) always seek to negotiate the financial values

It is almost always worth seeking to negotiate the financial values of the settlement agreement (particularly if, given the title of this article, you wish to increase the value of the redundancy payout).

What you will want to think carefully about is what you want to negotiate within the value of the redundancy payout: is it the ex-gratia payment (which can normally be tax-free for employees up to a maximum of £30,000), obtaining a sum in respect of your bonus or commission, or pushing for compensation for giving up rights to equity in the business (for example, losing rights to share options or shares), or to push for all of these payments? It’s important to go into the negotiations with a clear view of the payments you’re seeking (and the value of these payments), as once you’ve started negotiating it will normally be hard to add more demands ‘into the pot’.

Be clear and polite when negotiating

This is often an over-looked requirement: be firm in your negotiating stance, but be polite and clear when dealing with the other side (whether it’s you dealing directly with the other side, or your solicitor communicating your instructions). Grand-standing, tub-thumping, and aggression are hardly ever productive ways of communicating, and to engage in such behaviour will normally push you further away from your objective of increasing the enhanced redundancy payout rather than towards it. It can often be difficult to hold your emotions in check during the negotiating process (as your job is normally a core part of your identity, and losing your job is an emotional process), but try and view the negotiations as a pragmatic business exchange rather than anything else.

Take good notes of meetings

This, again, is an oft over-looked strategy: make sure that you’ve got a clear paper-trail recording what happened when, and how – information is, to a great extent, power in negotiations, and memories of events fade quickly. Keep relevant letters, emails, text messages (and any other written records) stored in an easily-accessible but safe electronic folder (for example, a Dropbox folder), and make sure that you make contemporaneous written notes of any meetings or verbal conversations that take place. You may wish to also consider recording important meetings, but beware: if you do this covertly then this could result in disciplinary action against you (as organisations quite often treat the making of covert recordings as misconduct (and even gross misconduct)).

Do your research

efore you start the negotiations make sure that you understand the factual and legal arguments that you are going to make to negotiate the increase to your redundancy package: what factual issues are key?; do you adequately understand the law relating to unfair dismissal?; do you adequately understand how the law relates to the facts of your matter?; how confident do you feel about your case?; how confident does your solicitor feel about the prospects of your unfair dismissal case and/or the negotiations? Understanding these issues will be key to you being able to have a grounded understanding of the risks and benefits of negotiating your redundancy payout, and to understanding the options that you have available to you.

Talk to colleagues

Speak to your current/former colleagues about previous redundancy processes, what happened during these processes, what payments were made, and their understanding of what happened during the redundancy process/any negotiations – again, information is power and the more you know about how the organisation deals with redundancy processes/redundancy payouts, the better the chance you will have of achieving what you want

Warning: be careful when talking to current/former colleagues about the above, as discussing these matters could be a potential breach of your organisation’s policies, your contract of employment, and/or your settlement agreement (or your former colleagues’ settlement agreements, as applicable).

Talk to a solicitor

This may seem like a fairly self-serving suggestion, given that I am a solicitor, but it can often help to speak to a solicitor for a number of reasons: they will have experience of dealing with these situations, so they’ll be able to let you know what they would expect to happen, and how to address the negotiations; they will, if you ask them to, deal with the negotiations with your employer themselves; they may give you more confidence in your position (or, equally, tell you if you’re being over-confident); and your employer will often pay for the cost of the advice if a settlement agreement is subsequently agreed and completed.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

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    Testimonials

    4.78 Average

    268 Reviews

    Anonymous

    Redmans Solicitors were consistently prompt, efficient and professional from the start of my reaching out to them for support in relation to contentious negotiations of an employment matter that continued for almost two months resulting in a positive settlement agreement. Chris Hadrill was diligent, thorough, empathetic and objective in his advice and guidance, showing deep and broad knowledge of the law and legal processes plus extensive practical experience in handling complex matters, resulting in clear and pragmatic advice in ambiguous circumstances that resulted in a very good outcome. I fully recommend Chris Hadrill and Redmans Solicitors! I have made this review anonymous purely because of the confidentiality obligations in the settlement agreement concluded.

    Posted 1 month ago

    Michelle W

    Redmans solicitors provided legal support and advice for a settlement agreement. Excellent customer service, very professional. The senior associate solicitor kept me updated throughout the process, showed empathy and the agreement was signed-off / completed within the agreed timeline.

    Posted 1 month ago

    Mark W

    Redmans Solicitors were extremely professional and helpful! Chris Hadrill handled my case and was an amazing help! His guidance, advice and understanding to my redundancy settlement were always clear, concise and very helpful and I am very grateful to him, and glad I found Redmans to help with my settlement. I highly recommend them!

    Posted 1 month ago

    Alison M

    Very happy with the advice I received

    Posted 1 month ago

    Margaret A

    I found everything about the company to be extremely professional and efficient. During my initial contact with Chris, he listened well and was reassuring, so I felt confident that my case would be well handled. Caroline was excellent at explaining all the legal points and answering my questions, as well as being very supportive and understanding throughout the process. I would definitely recommend this company.

    Posted 1 month ago

    Sanja K

    Very efficient and professional service.

    Posted 1 month ago

    Anonymous

    I found the advice I was given by Redmans Solicitors to be clear and useful and found the solicitor on my case to be both knowledgeable and approachable.

    Posted 1 month ago

    Karen T

    Great service. Thank you.

    Posted 1 month ago

    Anonymous

    Excellent service from Chris & Mel Chin. The best outcome was achieved from the redundancy process. They were extremely thorough, listened carefully and acted swiftly on my behalf. I highly recommend Redmans Solicitors

    Posted 1 month ago

    Shanine M

    Excellent service, thank you so much!

    Posted 1 month ago

    Anonymous

    I found Caroline and Chris very Helpful and provided excellent service. Caroline especially provided great legal advice and made me feel at ease with the whole process. I would highly recommend them. Thank you!

    Posted 1 month ago

    Gayle B

    Excellent company very professional would definitely recommend

    Posted 1 month ago

    Alex K

    Redmans provided an excellent service, timely and effective. Will definitely recommend.

    Posted 1 month ago

    Anonymous

    Great job done on my employment law

    Posted 1 month ago

    Dominica S

    Caroline & Chris were very prompt and efficient.Very happy with the service and will definitely recommend Redmans Solicitor to everyone !

    Posted 1 month ago

    Sandra K

    If you are looking for a group of solicitors who are Professional, Caring and on point, then look no futher than Redmans. I was literally hand held through out my case. Can not find fault with this company, very happy with the result and the service i received. Would highly recommend Redmans.

    Posted 1 month ago

    Anonymous

    I found dealing with Redmans a pleasure. I got to speak to someone quickly, the advice was profferred promplty and the service was not 'pushy'. In addition, the administration was excellent. What more could you ask for?

    Posted 1 month ago

    ALISDAIR L

    Redmans did a brilliant job regarding my redundancy agreement. I miss read an extra charge which wasnt the case so doing a new review to clarify. I would recommend Redmans for any employment law issues you may have.

    Posted 1 month ago

    Christos G

    Great legal advice and quick correspondence. Very supportive and helpful through the entire process. Thank you Redmans!

    Posted 1 month ago

    Anonymous

    Chris Hadrill advised me on a redundancy settlement agreement. He was very responsive, easy to deal with and gave me good advice at a stressful time.

    Posted 2 months ago

    Zara M

    Rana at Redmans gave me support and confidence I needed to ensure a wrong, was put right. I couldn’t recommend enough.

    Posted 2 months ago