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Issues to consider when drafting a settlement agreement—checklist (employer)

Issues to consider when drafting a settlement agreement—checklist (employer) The employer (and its advisers) should consider the following issues: Preparatory steps • Obtain from the employer: ◦ a copy of the departing employee's latest contract of employment/other relevant documents containing contractual terms (NB these may be in a staff handbook) ◦ details of the contractual benefits enjoyed by the employee ◦ relevant information regarding the employee's pension benefits ◦ relevant information regarding any shares/share options, etc held by the employee? Consider the Articles of Association/any relevant shareholder agreement, share scheme documentation, etc. See also Shares and share options below Status of negotiations • Will negotiations take place between the parties directly, or between their respective legal advisers? • How strong is the employer's negotiating position? How strong are the employee's claims or potential claims? In the case of dismissal, is there a fair reason and has the employer carried out a fair procedure? Is the employer in repudiatory breach? What is the employer prepared to offer initially, and is that...

Minimum wage calculation checklist [Archived]

Minimum wage calculation checklist [Archived] ARCHIVED: This Checklist has been archived and is not maintained. In general, this calculation looks at actual cash flows and payments between the employer and the worker (and vice versa) rather than entitlements. For further information on the different elements of this calculation, see Practice Note: National minimum wage, in particular the section: Checking pay against the minimum. For a checklist summarising the main issues to consider when determining whether or not someone is entitled to receive and receives the minimum wage, see: Minimum wage compliance checklist. Pay = (A + B) - (C + D) where: • (A) is actual payments • (B) is deductions to be added back to the actual payments • (C) is excluded payments and benefits • (D) is deductions to be subtracted from the actual payment (A) Actual payments These are: • actual payments made in the pay reference period (including pay and expenses) • actual payments made in the following pay reference period which are referable to the...

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Definition of redundancy

This Practice Note examines the two different statutory definitions of 'redundancy'.The first is found in the Employment Rights Act 1996 (ERA 1996). Whether or not it is satisfied determines:•whether an employee may be entitled to a statutory redundancy payment (see Practice Note: Entitlement to statutory redundancy payment)•whether, in the context of an unfair dismissal claim, the reason for dismissal is redundancy (which is one of the potentially fair reasons for dismissal—see Practice Note: Reason for dismissal—redundancy)For further information regarding this first definition, see: Redundancy payment entitlement, and fair reason for dismissal, below.The second statutory definition is found in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), and is relevant in collective redundancy situations. This definition must be satisfied (as well as other criteria) before the obligation to inform and consult appropriate representatives will arise (see Practice Note: Collective redundancy—the triggers for the statutory consultation obligations).For further information regarding this second definition, see: Definition of redundancy for collective redundancy consultation, below.In many redundancy situations, whether the dismissal satisfies...

Contractual redundancy payments

This Practice Note considers when an employee may be entitled to a redundancy payment under a contractual redundancy scheme (enhanced or occupational redundancy scheme or redundancy policy) and the interaction with the statutory redundancy scheme. It outlines the enhancements that are typically offered by employers. It also considers potential issues such as whether an employer can defeat entitlement under an enhanced redundancy scheme by giving notice to employees for another, non-redundancy reason. Remedies, age discrimination and taxation issues are also examined.Under the Employment Rights Act 1996 (ERA 1996), an employee who is dismissed by reason of redundancy after two or more years’ continuous employment will be entitled to a statutory redundancy payment, based on their age, length of service and average weekly pay, subject to a cap.For further information, see Practice Note: Entitlement to statutory redundancy payment.However, it is relatively common for employers, particularly larger employers and those that are unionised, to pay redundancy payments to redundant employees in excess of the statutory redundancy payment. These are often known as...

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Statement of calculation of statutory redundancy payment

Statement of calculation of statutory redundancy payment [Insert name of employee] Your redundancy payment has been calculated in accordance with the statutory redundancy scheme as set out in the Employment Rights Act 1996. On the date on which your employment terminated for redundancy you had completed [insert number] years of continuous employment and were [insert age] years old. By statute you are entitled to: 1½ weeks' pay for each complete year of employment in which you were not below the age of 41; 1 week's pay for each complete year of employment between the

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±Ê´Ç±ô¾±³¦²ââ€À¹±ð»å³Ü²Ô»å²¹²Ô³¦²â 1 Introduction 1.1 The Company is committed to providing job security for its employees. The Company will seek to avoid compulsory redundancies wherever possible. However, it recognises that there may be circumstances when staffing requirements change and compulsory redundancies cannot be avoided. 1.2 Where compulsory redundancies are unavoidable, the Company will handle the redundancy exercise in a fair, consistent and sympathetic manner. 1.3 In following the redundancy procedure set out in this policy, the Company will not discriminate directly or indirectly on grounds of age, disability, gender reassignment, marital or civil partner status, pregnancy or maternity, race, religion or belief, sex or sexual orientation. Part-time workers and fixed-term employees will not be treated less favourably than full-time or permanent comparators. 1.4 The aim of this policy is to set out the procedures that will be followed in cases of redundancy, ensuring compliance with employment law[ and relevant Acas guidance]. 1.5 This policy applies only to employees who are affected by a potential redundancy situation. It does not...

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On a dismissal for redundancy, how can the employer make an employee agree to enter into a settlement agreement when paying their redundancy payment? How can the employer be protected from the risk of a potential discrimination claim if an employee refuses to sign a settlement agreement?

On a dismissal for redundancy, how can the employer make an employee agree to enter into a settlement agreement when paying their redundancy payment? How can the employer be protected from the risk of a potential discrimination claim if an employee refuses to sign a settlement agreement? This Q&A considers the contracting-out provisions, and the need for a settlement agreement, and how an employee might be incentivised to enter into a settlement agreement. Contracting-out provisions For information on settlement agreements generally, see Practice Notes: • How to use a settlement agreement in employment • Settlement agreements in employment—legal requirements • Settlement agreements in employment—practical and tax issues Like other employment legislation, the Equality Act 2010 (EqA 2010) includes 'contracting-out provisions'. Contracting-out provisions prevent the parties (or potential parties) to an employment tribunal claim from reaching an agreement that purports to settle the claim and, in so doing, purports to have the effect of ousting the jurisdiction of the employment tribunal to adjudicate upon the dispute. The contracting-out provisions...

Can an employee submit a claim to the Redundancy Payments Office in respect of protected payments where a writ of control has been returned unexecuted (which is an insolvency event under section 123 of the Insolvency Act 1986) or do they have to be in a formal insolvency procedure first?

Can an employee submit a claim to the Redundancy Payments Office in respect of protected payments where a writ of control has been returned unexecuted (which is an insolvency event under section 123 of the Insolvency Act 1986) or do they have to be in a formal insolvency procedure first? An employee may apply to the Department for Business, Energy and Industrial Strategy to pay the statutory redundancy payment out of the state guarantee fund (the National Insurance Fund) if they are unable to obtain the payment from their employer because either the employer refuses to pay or is insolvent. For further information, see Practice Note: Redundancy—insolvency and the state guarantee fund. Refusal to pay If the employer is solvent but refuses to pay, the employee will need to show that they have taken 'all reasonable steps' to obtain payment under section 166(1)(a) of the Employment Rights Act 1996 (ERA 1996). For further information, see Practice Note: Redundancy—insolvency and the state guarantee fund—Employer's refusal. Employer insolvency Commentary:...

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FTT holds discrimination settlement payment not taxable (L v HMRC)

Tax analysis: In L v HMRC, the First-tier Tax Tribunal (FTT) held that the part of a settlement payment which related to a discrimination claim fell outside the scope of income tax. This was on the basis that the payment was not ‘from employment’; instead it was made because the discrimination had deprived the former employee of the opportunity to perform her full role, causing financial loss.

Insolvency Service publishes annual report and accounts for 2023-2024

The Insolvency Service has published its 2023-2024 annual report and accounts which provides an overview of the agency’s performance. Notable changes for the Insolvency Service this year included launching an Anti Money Laundering Intelligence Cell to disrupt financial crimes, establishing a new fee income stream from the Economic Crime and Corporate Transparency Act and rolling out a directors' information hub to guide companies through insolvency.

View the latest UK Parliament Acts documents on Redundancy payment

135 The right

135  The right(1)     An employer shall pay a redundancy payment to any employee of his if the employee—(a)     is dismissed by the employer by reason of redundancy, or(b)     is eligible for a redundancy payment by reason of being laid off or kept on short-time.(2)     Subsection (1) has effect subject to the following provisions of this Part (including, in particular, sections 140 to 144, 149 to 152, 155 to 161 and 164).