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Negotiating a Redundancy Package with your Employer

By: Paul Geraghty - Updated: 12 Feb 2018 | comments*Discuss
 
Negotiating A Redundancy Package With Your Employer

Redundancy packages don’t have to be set in stone. Although it varies by company, and with the seniority of your position, there is often scope for you to thrash out the terms of a redundancy deal with your employer. You can either do this directly, or even bring in an outside lawyer to do it for you. The Golden Rule is : don’t agree over hastily to the first deal you’re offered. Play it cool. Ask to see the proposals in writing. Say you’ll need to think about it. Then come back with some suggestions of your own.

Understanding your Negotiating Leverage

If you’re going to get into negotiations with your employer, it helps to understand what leverage you have. After all, you need to know why this person is negotiating with you at all. Why doesn’t he just kick you out of his office?

First, don’t underestimate the old human relationship\goodwill factor. It does still exist. Particularly if you’ve worked with certain managers for a long time, they’re probably going to feel a little guilty about having made you redundant in the first place, giving you some emotional leverage. For this reason, when embarking on a negotiation, it’s usually best to avoid the adversarial approach, and attempt to maintain a cordial and professional tone with your employer, at least at first.

Second, if the firm is continuing in existence, the employees who remain will want to see that their former colleagues are treated well. After all, they know that they could be next. The employer knows that failing to do right by the departing employees will have a corrosive effect on the morale of those who remain; they may even begin to think about jumping ship too.

Third, the law surrounding redundancy is complex. There is often substantial scope for disgruntled employees to bring claims against the former employer. These claims can be expensive if eventually awarded by the Employment Tribunal; and can constitute very damaging publicity even if not. From the employer’s perspective, it’s a whole lot of grief he’d rather not have to deal with. That’s why he’s negotiating. If you personally become aware that your employer has violated the legally-mandated redundancy procedure in some way, naturally that allows you to push a little harder in the negotiations.

If you’re in a very senior position, you may even know some of the firm’s dirty secrets. That gives you extra bargaining power.

What to Negotiate

Most obviously, you want more money. Flat-out asking for it might just work, but it helps if you can think of specific reasons why you individually deserve more. For example, let’s say the firm’s redundancy criteria included the number of sales each employee had made over the last 2 years but during that time you had been on a 3-month training course. You could claim that the time out affected your sales figures adversely and therefore your selection for redundancy may not have been completely fair. A statement like that contains just enough of a hint of future legal proceedings to get your employer to cough up some cash.

It may be possible for you to negotiate financial assistance for retraining as part of your redundancy package. Reasonably enlightened employers, who are trying to do the right thing by you, rather than just fob you off with the statutory minimum, sometimes agree to pay for courses you propose or for those suggested by career development consultants whose time they will also pay for. A career development consultant will talk with you first to learn more about what direction you would like your career to take before recommending appropriate courses. Sometimes an employer will agree to offer cash for future retraining without knowing specifically what it will be used for.

If you receive ancillary benefits, such as private medical insurance, as part of your remuneration package, the company will often be willing to agree to its continuance for a reasonable period of time, such as six months to a year. If during your employment, you have been using company-owned equipment, such as laptops and mobile phones, even cars, an employer will sometimes agree to throw these into the redundancy package.

Negotiating a Redundancy Package – Conclusion

When you’re about to be made redundant, you have very little to lose by trying to negotiate a better redundancy package from your employer. Your employer wants to avoid subsequent legal action so will often be more flexible than you might expect.

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Hello, I hold a senior level position and my Employer has decided to eliminate my role under the pretext of restructuring for cost savings reasons and increase in efficiency. Verbally they have offered to pay me statutory redundancy package. I personally think my job will eventually be moved to US as that is what they have always done in the past, eliminate a position as part of restructuring and then bring in a new person. Person leading the change, in the past, had shown some bias against my business function by avoiding weekly one to ones as my direct manager. Can you advise if I have a chance of getting more than statutory redundancy amount? Thanks Dimpy
DcDimpy - 12-Feb-18 @ 3:44 PM
They are closing a department and there will be other jobs, but from the job descriptions they have specific people in mind. Can I use this?How do I prove this. Also can I use gender descrimation over the years - I was bluntly told a colleague, younger and less experienced would be offered manager (it never happened in the end), I was told 'its a mans world just accept it' Also a lot of team emails were sent to him and not copied to myself (from Japan). Tks SRJ55
srj55 - 6-Jan-18 @ 1:33 PM
Hi, I was told on the 7th Aug bymy chairman that they were intending to sell the building I work in and relocate aand merge with another organisation who are in nother town, they would then employ someone poss 2/3 days a week on obviously a lesser salary, I have had no communication since, I have worked with this political organisation now for 11 years I am the sole paid employee. I was wrongly advised of my notice period during my very ad hoc meeting as well as my redundancy amount (I know I am entitled to at least the statutory).I have heard through the "grapevine" that the move to the another organisation/town is not now happening but the building is still to be sold the business move to another location approx 15 mins away but I am still to be made redundant, given I do the book keeping for this organisation I know they do not have sufficient funds to pay me right now, however I understand now what they want to do is delay paying me my redundancy but still want to work for them in a very much reduced hours basis, I am concerned that should I do this then they will, when the time comes, calculate my redundancy based on the lesser hours.I feel my best course of action is to push for my redundancy now. What would your advice be.Thanks Kitty
Kitty - 20-Sep-17 @ 4:17 PM
Hi - sorry for the lengthy comment but I'd appreciate any thoughts before paying for independent legal advice.I found out today I am being offered redundancy. Our team's function is being relocated to another country, with the same roles and responsibilities following a review of our current structure, function and management.My boss told me we could apply for the "new" posts, no relocation costs offered, or take redundancy.My boss went on to tell me that one of my subordinates has been offered his equivalent position in the new set-up if he wants it.Or he can also choose redundancy. Is that fair when the rest of us have been told we have to apply for our posts? This particular team member is highly valuable and they definitely do need him. I suspect my employer wants me to leave and that is why I have not been offered my equivalent role.I have always performed well and have achieved a bonus every year. However, I have caused HR issues with complaints about my boss's behaviour and lack of management skills. I don't know whether to try and negotiate a more lucrative redundancy package by pointing out that they appear to have treated people in the department differently. I was already on the verge of resigning and suing the company for Constructive Dismissal and my HR dept know that I have a strong case. Two other people of my grade have resigned in the last 3 years and been paid off after threatening with a Tribunal. My redundancy package will be about 60k and my salary is around 65k. But my yearly package, with bonus, car allowance, medical insurance etc is around 85k. I am a 47 year old single woman with lots of experience and a good reputation in my industry but no formal qualifications.
Shafted - 30-May-17 @ 11:41 PM
@Tony - you're not being made redundant - you've had a performance review and you have under performed so you are being 'let go', (is how I see it). In which case you're unlikely to get more than six weeks severence pay. Tom.
TTJ81 - 30-May-17 @ 12:56 PM
Hi, Thanks for posting such a detailed article regarding redundancy. Just need some advice. I was head hunted by my current employer. I worked here for nearly a year and half. My current and former employers are both in the same industry. After a recent performance review, my current said my performance has dipped over the last 2-3 months and they wanted me to leave with 6 weeks pay or stay and work with added pressure combined with the possibility of being on disciplined. Long story short, have made contact with me former employer, they told me want me back as soon as possible. What is the best way to get as much redundancy pay as I can for the year and half service before jumping ship? If I hand in my notice it means they will put me on gardening leave without a redundancy package. What's the best approach get offered a package before formally rejoining my former employer? Thanks
Tony - 30-May-17 @ 8:31 AM
I was approached by my current employer with a job offer after they heard of the work I had done at my employer at the time. I was asked to join a bug FTSE company and undertake a large change project and introduce a new department into the business. I reported into the CEO. Had no JD as the job was created for me and I was to be given a "free reign" to go out and do what I needed to do. However the reality was very different to the role I was sold and I barely met with my line manager fir the first 6 months so had little or no support. He even admitted in the last meeting I had with him that I gad been treated poorly and getting "felt sorry for me". After just under 8 months with the business I gave just been told that they have decided nit to go age as with their plans and as such I no longer had a job. I left a job that paid an extremely high salary to join them. I am entitled to 6 months notice and they gave already said that they would be willing to pay the maximum £30k from my 6 months as a redundancy element but I feel that given the circumstances I should be offered more than my basic 6 months as a gesture and intend to ask for 12 months with the same £30k element. Is this a reasonable thing to ask?
SB - 28-Oct-16 @ 7:33 AM
I was given a date when my redundancy would be paid up but the company has failed to honor it saying the have financial difficulties was I mislead and can anything be done ?
mim - 1-Apr-16 @ 2:55 PM
Babsterro - Your Question:
Please can you explain to me the difference between Retrenchment and Redundancy and what are the values.I have receive a retrenchment letter but I was given redundancy package is that right.Please help me, I am a Ghanaian citizen.

Our Response:
This is something you would have to do an online search for, as we only deal with UK-based issues on redundancy. However, as a general rule they mean the same thing.
RedundancyExpert - 29-Oct-15 @ 12:34 PM
Please can you explain to me the difference between Retrenchment and Redundancy and what are the values.I have receive a retrenchment letter but i was given redundancy package is that right.Please help me, i am a Ghanaian citizen.
Babsterro - 28-Oct-15 @ 2:27 PM
Andy - Your Question:
I have been put a risk of redundancy and my notice period is 6 months.I drive a Company Car and have a phone and laptop. If my employment is terminated at my final meeting due to redundancy can I still keep my car etc for a further 6 months in lieu of notice??ThanksAndy

Our Response:
Unless your contract say otherwise, and sets a time limit on you being allowed to keep the car as a specific company policy, or it is negotiated with your employer as part of your redundancy package, then you would generally have to hand the car back when you have worked your notice and leave.
RedundancyExpert - 9-Oct-15 @ 9:52 AM
I have been put a risk of redundancy and my notice period is 6 months. I drive a Company Car and have a phone and laptop.If my employment is terminated at my final meeting due to redundancy can I still keep my car etc for a further 6 months in lieu of notice?? Thanks Andy
Andy - 8-Oct-15 @ 9:30 AM
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