How to negotiate your exit if you’re made redundant

In my many years of experience in advising on employment law, every redundancy is different: each has its own backstory, emotions, and challenges.

Being made redundant can feel incredibly personal. But no matter how unsettling it may seem, redundancy is not a ‘one size fits all’ process, and if you’re prepared, you can often negotiate and improve your exit package.

Once they have begun redundancy consultations, employers are often keen for a swift and smooth exit because the process has a risk of damaging staff morale, can be time consuming and prevent the management team from focusing on the future of their business.  

Some employers, particularly in financial and professional services, are prepared to pay a premium to bring the process to a prompt conclusion, and most employers will be open to considering your reasonable requests. The challenge is to focus on improving your package pragmatically and commercially at a time when you may well feel upset, angry or vulnerable.

Whether you seek detailed legal advice, or choose to deal with it alone, the first thing you should always consider is what you want. Thinking about your desired outcome will help you to form your negotiation strategy.

Prepare for your redundancy consultation with your employer

You may have one or more meetings with your employer to discuss the potential redundancy and any exit agreement.  In preparation, make sure you have ready:

  • Your employment contract and any relevant policies. If you don’t have copies, you can always ask the HR team for them; and
  • Ask what the process will look like, and whether there is a contractual, established or written redundancy policy or practice. You may find this in the staff handbook.

Questions to ask your employer in your redundancy meetings

Be sure to take notes of any consultation meetings as, in stressful situations, comments can be easily forgotten. You could ask for permission to bring a companion to make notes for you, request the transcript from your employer’s note-keeper or, if the meeting is virtual, ask if it can be recorded.

Even if you have been employed at your workplace for less than two years – which limits the employment law remedies available to you – it’s still important to ask your employer questions, such as:

  1. Why is this redundancy being considered?  Is there a reduced need for the type of work I do? Is my work going elsewhere? If so, who is going to do it? Why has it been proposed that another role/person will do my work rather than me?
  2. What alternatives to compulsory redundancy have been considered (for example, a recruitment freeze; ceasing to outsource certain types of work; voluntary redundancies)?  If you have proposals of your own, this is a good time to put them forward.
  3. Are others at risk of redundancy in my location? If so, how many and when? This information could be useful when working out if the redundancy process should involve collective, as well as individual, consultation.
  4. If there is simply a reduced need for the work I do, why and how have I been placed at risk? Try to understand the “pool” of people considered for redundancy, the selection criteria used and the basis on which you have been scored. Provide feedback if any of these do not seem fair, and especially if you believe you may have been selected for a discriminatory reason.
  5. Are there alternative roles for which I could apply? Have I been considered for these roles?

You can also request a follow-up meeting, which is a particularly good idea if you have not understood any information provided to you or feel overwhelmed by the process or unduly rushed.  

If after the meeting you feel that the reasons for redundancy aren’t genuine or your selection has not been fair you should seek legal advice immediately. You can do this at any point throughout the process.

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When to accept a redundancy package

There are two types of redundancy pay: statutory and contractual. If your employer follows a fair process, you’ll most likely be entitled to statutory redundancy pay as long as you’ve been employed for two years. You can calculate your statutory redundancy entitlement on the GOV.UK website.

If you’re offered a redundancy package, ask your employer if it has been applied to other redundancies and if there is a practice of paying more than statutory redundancy.

You may have the option of accepting an enhanced package if you’re willing to exit quickly and with minimal fuss. If this is the case, consider your circumstances and whether this feels like a good outcome for you.  If you were offered an enhanced payment, you would probably be required to enter into a settlement agreement waiving your right to bring claims against your employer.  You would require legal advice on the terms and effect of this agreement, with legal fees usually funded by your employer.

What to ask when negotiating a package

Depending on what you want from your package, and what benefits you’ve received already during your employment, consider what requests you can make in the negotiation. Many employees ask for an increase to any redundancy payment offered, and sometimes this is forthcoming, either as a gesture of goodwill or because the employer perceives legal or commercial risk if terms are not agreed.

Think about other other benefits too, for example if you have private medical insurance, perhaps you want to ask to extend your healthcare benefits, especially if you or a family member is undergoing treatment. Or you might ask to retain your company laptop or phone.

Some employers are willing to provide outplacement support to help departing staff re-orient themselves with the job market and find another role.

If you have restrictive covenants in your employment contract which might limit your ability to find a new role, it may be sensible to ask to have these disapplied or reduced in length.

Depending on your contract you may be required to work your notice or be paid in lieu of notice (leaving your role immediately but paid a lump sum equivalent to your notice pay) and sometimes this can be negotiated on your terms.  For example, you may ask for your employment to be terminated immediately, so that you can find a new role without delay. Or if your employer doesn’t want you to work during your notice period you may prefer to be put on gardening leave (technically remaining still employed but not actively working) as you may feel that it will be easier to find a new role while still in a job.

Remember, there are often options, and it’s important to take the time to consider what would be best for you in the circumstances. If you are concerned about the fairness of the process or your treatment, the sums at stake are substantial or you would just like additional support, consider seeking the help of an employment lawyer to guide you through this process and to represent you in discussions with your employer. It’s worth asking friends who have been through similar experiences for recommendations as the process is much easier when you feel your adviser has got your back.

Florence BrocklesbyAbout the author

Florence Brocklesby trained and qualified, in 2000, at leading international law firm Freshfields Bruckhaus Deringer, where she worked for eight years, including time in the firm’s London, Brussels and Hong Kong offices, before moving to the London office of the US firm Debevoise & Plimpton prior to founding Bellevue Law in 2014. Florence handles both commercial disputes and employment law matters, and she advises a range of clients including individual employees.  She regularly acts for senior professional women in defending their workplace rights, including in sex and maternity discrimination claims, and cases of sexual harassment or assault.

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