By Ethan Diver on Small Business UK – Advice and Ideas for UK Small Businesses and SMEs
Key takeaways:
Settlement agreements can save employers from employment tribunal, which reduces cost, time and the potential for reputational damage.
As an employer, you should consider whether, how and when you should offer settlement agreements during the redundancy process.
Many employers make settlement offers before or during the early stages of the consultation process, as an alternative option.
Employers should also consider taking specific legal advice before deciding whether to offer a settlement agreement in any particular circumstances.
Settlement agreements are an increasingly popular method by which employers can terminate the employment relationship on agreed terms and ensure this does not lead to employment tribunal claims.
This is no different in the redundancy context, where employers commonly offer settlement agreements to affected employees to avoid the risk of unfair dismissal claims. These claims could arise where employees dispute their roles are redundant and/or allege their employer has followed an unfair procedure.
However, employers should carefully consider whether, when and how they offer settlement agreements during the redundancy process, considering that employees are under no obligation to accept them. In fact, there is a risk that poorly conducted settlement discussions could