Employers will from time to time have to review their workforce needs to adapt to changes, both internal and external. It is not uncommon in these circumstances for employers to look to make changes to the structure of their business and to trim their wage bill.
But employees who have worked for 2 years or more enjoy statutory protection from being unfairly dismissed. Therefore, to terminate the employment of those falling into this category, employers are under a duty to undertake a fair and transparent redundancy process.
The redundancy process can be destabilizing for the workforce as a whole, time consuming and upsetting for all affected. To avoid the process, an employer has the option of making a confidential offer to the employee, often with an additional financial incentive, to accept the early termination of the contract of employment; a win-win situation for both employer and employee. If accepted, the agreement is contained in what are commonly referred to as Settlement Agreements.
To protect the employer, an independent solicitor has to certify that he or she has advised the employee of the terms of the settlement, and in particular, explained to the employee the rights that he is giving up, in return for the enhanced settlement package. The employer has to undertake to pay for the employee to receive this independent advice.
At Stokes Partners LLP, we are able to offer advice and guidance to both employees and employers in respect of Settlement Agreements.