Redmans Helps Client Who Was Being Made Redundant Increase Settlement Agreement Offer
Chris Hadrill, a specialist employment solicitor, represented a client who was being made redundant and negotiated the client’s settlement agreement. He secured an increase of over £3,500 to the tax-free settlement sum for her and also helped the client secure other amendments to their settlement agreement.
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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. While she wasn’t entirely unhappy with this, 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 she sought legal advice. She instructed Redmans to negotiate her settlement agreement for her and Chris Hadrill, the partner and employment law specialist 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 was terminated.
What We Did
Chris discussed Felicity’s settlement agreement with her – he noted that Felicity was quite happy to leave the business. However, she wanted to improve her agreement by extending the termination date and increasing the ex-gratia tax-free amount of the settlement agreement.
Chris negotiated an increase of £3,500 to the ex-gratia tax-free value that had initially been proposed for Felicity. Chris also persuaded Felicity’s employer to extend the termination date, as well as secure 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
Felicity’s employer agreed to increase the value of the tax-free ex-gratia sum of the settlement agreement by over £3,500, 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.