Redundancy & Settlement Agreements

In uncertain times, businesses sometimes need to reduce their workforce and, as a consequence, you could find yourself in a redundancy situation.

We are one of Scotland's leading law firms and our specialist team of employment lawyers advise hundreds of employees each year on their rights when faced with redundancy.

Your rights during a redundancy process

If you are facing redundancy, you have a number of rights that your employer must respect during the process.

In order to dismiss you fairly by reason of redundancy, your employer must show that there was a genuine redundancy situation, that you were fairly selected and that a fair redundancy process was followed.

If those requirements are not met then the dismissal may be unfair and you, as long as you have two years’ qualifying service, will be able to claim unfair dismissal at an employment tribunal.

There are also certain circumstances in which a redundancy dismissal may be 'automatically unfair' in which case a claim can be made without the need for two years’ service.

This would generally occur if an employee was selected for redundancy due to an 'inadmissable reason' such as a pregnancy or because they tried to exercise a statutory right.

Calculating redundancy pay

You may be entitled to a contractual redundancy payment, depending on the terms of your contract or your employer’s redundancy policy. If you have more than two years’ service you will be entitled to a statutory redundancy payment.

The amount is based upon a multiplier of a weeks' pay (subject to a statutory cap) depending upon your age and length of service.

Settlement agreements

A settlement agreement is essentially a way for you and your employer to ‘part company’ on amicably agreed terms, where you will waive (or give up) your right to bring any claims against your employer, aside from some limited exceptions.

It is a binding agreement affecting both parties. However, you do not have to enter a Settlement Agreement unless you agree, and it may be suitable to negotiate terms of the proposed Agreement. Our lawyers will be able to advise you about what would be reasonable and appropriate in your circumstances.

By law, you need to take legal advice and a settlement agreement is only valid if you have taken independent legal advice as to its terms. Although you are responsible for your solicitor’s fees, employers normally agree to make a contribution.

Financial advice for workers facing redundancy

As an independent financial adviser, we can also help you arrange your finances following a redundancy event.

Our financial advisers can help you cushion the blow and avoid any potential pitfalls. They can help you with:

• What to do with the pension pot you are leaving behind
• How to make the most of any redundancy payment
• How to make sure you have the right protection in place for the future
• How to get help paying your mortgage
• Early retirement