Redmans help client increase their settlement agreement offer by over £3,500

Summary

How Chris Hadrill, a specialist employment solicitor, represented a client in in a redundancy situation and negotiated the client’s settlement agreement, securing an increase of over £3,500 to the tax-free settlement sum for her. Chris also helped the client to secure other amendments to their settlement agreement.

Situation

Felicity (not her real name) worked for a music services company for many years. She was approached by her employer in 2018 and told that she would be made redundant. Felicity wasn’t entirely unhappy with this but she believed that she wanted to negotiate the settlement sum she was being offered, as it only represented about two months’ salary (plus her notice and statutory redundancy).

Felicity was offered a settlement agreement by her employer and sought legal advice. She instructed Redmans to negotiate her settlement agreement for her and Chris Hadrill, the partner in the employment department at Redmans, advised Felicity on her matter. In particular, Felicity wanted to negotiate the tax-free ex-gratia value of the package she was being offered and extend the termination date of her employment, so as to give her as much opportunity as possible to find a new job before her employment terminated.

What we did

Chris discussed Felicity’s settlement agreement with her – he noted that Felicity was quite happy to leave the business but that she wanted to improve her agreement by extending the termination date and increasing the ex-gratia tax-free amount of the settlement agreement.  Chris agreed a list of amendments with Felicity and sought to negotiate these with her employer, representing her in the settlement agreement negotiations.

Chris negotiated a higher value of settlement agreement (an increase of £3,500 to the ex-gratia tax-free value that had initially been proposed) for Felicity. Chris also managed to persuade Felicity’s employer to extend the termination date, as well as securing a number of other improvements to the settlement agreement that Felicity had requested. Finally, it was agreed that Felicity’s employer would increase their coverage of legal fees under the settlement agreement so as to cover a large amount of the cost of Felicity receiving legal advice.

The result

After a short period of negotiation, as detailed above, Felicity’s employer agreed to increase the value of the tax-free ex-gratia sum of the settlement agreement by over £3,500 (a sum equal to approximately a month’s salary for Felicity), to pay Felicity out for her notice period and holiday, and extend the termination date. It was also agreed that the terms of the agreement – and the reason for Felicity leaving her employer – would be covered by a mutual confidentiality clause, that both parties would agree to not say derogatory things about the other after the agreement was completed, and that Felicity would receive an agreed written reference from the business in the future.

Chris Hadrill, the specialist employment solicitor who dealt with Felicity’s case, commented on the case: “I was delighted to assist Felicity in securing an improvement to the terms of her settlement agreement and, in particular, increasing the value of the tax-free ex-gratia sum payable under the settlement agreement.”

Please note that all of the names used for clients and third parties in this article and other articles are anonymised (unless expressly stated otherwise) to protect client confidentiality