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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

143 Reviews

Liz P

An excellent professional service was provided by Chris Hadrill and Mel Chin. Efficient and trustworthy - would highly recommend this company.

Posted 6 days ago

Anonymous

Redmans Solicitors were great. They were able to advice me quickly and efficiently! I would recommend them, as a good solicitors to use.

Posted 6 days ago

Anonymous

Extremely efficient. Mel made a difficult situation bearable and gave good clear guidance thoughout.

Posted 1 week ago

Anonymous

Thanks Chris and Sacha I was reassured throughout the process and a happy outcome

Posted 1 week ago

Edward F

Good and clear employment advice

Posted 1 week ago

Richard O

Chris at Redmans is my go-to legal expert when it comes to employee-related matters. His depth of knowledge, experience and considered approach to problems and their solutions is highly valuable. I cannot recommend Redmans highly enough.

Posted 3 weeks ago

Rory Y

They provide me with timely and clear advice!

Posted 3 weeks ago

Steven C

Redmans handled my settlement with my employer quickly, decisively and to a standard that I was very happy with. I would in similar circumstances contract them again

Posted 3 weeks ago

Deepthi K

Transparent. Clear communication. Prompt reply’s. Saves lot of time. Very satisfied.

Posted 3 weeks ago

Anonymous

Chris and Sacha did a fantastic job and negotiated a significant better settlement agreement

Posted 3 weeks ago

Dino D

I did get a very swift and god service from Redmans

Posted 3 weeks ago

Stephanie H

Clear, prompt, effective support from Chris which has been very much appreciated. Thank you again.

Posted 1 month ago

Anonymous

I would highly recommend Redmans Solicitors, the team were very friendly and my case was dealt with professionally and efficiently. Thank you!

Posted 1 month ago

Shane M

Very professional, welcome advice at a crucial time. Always available and reasonable cost.

Posted 1 month ago

Anonymous

My case was relatively straight-forward. But even so, working with Redmans was easy, quick, professional & clear. Many thanks

Posted 1 month ago

Anonymous

The team were very helpful and answered all my questions regarding my redundancy. Initially I had a call with one of the representatives who escalated my request to a suitable employment solicitor. We arranged a call to discuss the settlement and she helped answer all my questions. We then mainly contacted through email which helped resolve the settlement quickly and convently. Thanks for all the help.

Posted 1 month ago

Djaouida T

You have good communication.

Posted 2 months ago

Anonymous

Fast and professional. A highly recommended company for employment related issues.

Posted 2 months ago

Anonymous

Very professional service.

Posted 2 months ago

Brittany

I was very grateful for Redmans to treat my case with respect and discretion. At the time, I was very new to London and it was meaningful to have someone on my side and win the case for me. Without any doubt, I would definitely recommend Redmans Solicitors to anyone who is in need of it.

Posted 9 months ago

Jake L

Chris is very professional and calm. Very attentive and patient, been a positive experience having Chris represent me, and would recommend him.

Posted 11 months ago