Settlement Agreements and Long-term Sickness

Settlement agreements are now widely used in the UK. They have been received well in the workplace and were thought to be a good thing. However, since 2013 many realised they can only be used with certain staff when using standard procedures- bypassing these procedures can put employers in trouble. Seek legal advice on settlement agreements if you are considering this as an option for an employee.

Although Settlement Agreements can be a beneficial offer to workers with a long term absence, they could actually end up backfiring. Settlement agreements can be an option for agreeing a severance package with an employee. They should not replace processes and procedures.

A long-term bout of sickness usually indicates that the employee could be eligible for disability under the Equality Act. Conditions like cancer and MS are now considered disabilities, which means you can’t discriminate against them.

Otherwise, the meaning of disability would be an inability to perform everyday activities. If a sick worker’s condition continues for one year or may last for a year, they are legally entitled to disability benefits.

The right to have confidential conversations was first introduced with Settlement Agreements when they replaced Compromise Agreements in 06/2013.  The idea is to have employers and employees enter into a pre-termination negotiating process, before any time or resources are wasted in dismissal proceedings.

Generally, you can’t make a wrongful termination claim involving these hearings. But regarding claims of workplace discrimination, a different set of rules apply.

Several employers have contacted us who were willing to pay a severance package only to end up with a discrimination case.

They had ended up paying me even though they were not actually in the process of termination. Simply being blind to the disability cannot always be a defence, as the obligation to know is often judged subjectively. If it can be shown that the employee has been sick over the long term due to a health issue that may last around a year and it can be demonstrated they are not required to work, then they might have a defence even if they were unaware.

Coming forward with a termination agreement when you can make modifications is better than proceeding with a termination. Canceling an employee will weaken your side of the story and create a negative image.

If you are suffering because of something your employer said or did, you can claim Injury to Feelings Awards without having to quit your job.

Employees often request severance as part of their leave from a company. In this situation, employers should still make adjustments to the agreement procedure. It might be allowing them more than the ten days as recommended by Acas.

If a person feels that they want to continue working and don’t want to be subject to severance, it is your obligation to recommend it.

Employers should solicit medical advice for employees who are sick for long periods of time. Not only to check if they actually have a disability, but also to see if any adjustments can be made to help them get better and come back to work.

After the Government introduced the Fit for Work service, which provides a health analysis and advice as well as prescribes benefits if needed, there is absolutely no excuse not to do this.

Settlement Agreements can help to provide protection for the company when an employee leaves, but never should be used to bypass fair procedures.

Would you approve of your tribunal looking at proposals for the settlement of any dispute if your employee decided to reject it?

By giving notice, the former employee will be able to decide whether to remain or leave. They can also decide if their termination package is sufficient and fair.

Reasons for Redundancy

Redundancy is unavoidable, but employers have to make ensure the criteria they are basing your redundancy on are fair and not based on any criteria deemed unfair.

In this instalment, we’ll explore why redundancy is necessary and the considerations that employers need to make when using furloughed staff as redundant.

Redundancy Occurrences

Redundancy is only an option if the employee no longer needs their position. This usually happens when their role becomes unnecessary.

If a few situations qualify as redundancy, they include the following:

The employer no longer needs your skill-set

We realise that a reduction in personnel might be necessary. This could be due to reduced demand for your business’s services or the specific skillset of an employee is no longer needed for future work.

New systems have been implemented

If a new processes have been introduced that means the employee’s job is no longer required, redundancy may be used. But, introducing a new process doesn’t mean that an employee is redundant.

The work has been allocated elsewhere

Another reason employees could face redundancy is if their job is no longer needed because it has been taken on by others.

The company will be terminating

Typical situations where redundancies can happen is when a company closes down. The reason for this is that these companies may need to make significant changes in order to remain profitable and competitive.

Business is moving to another location

If you relocate your business to a new area, you may need to reach out to an HR specialist for assistance with determining whether or not the employee is redundant.

Why you may face a fair redundancy

It’s worth pointing out that how long someone has been employed cannot be the only factor taken into consideration by employers when deciding if they are redundant. Last employed, first to go policies are sometimes called age discrimination because they disproportionately affect younger employees.

Employees with qualifications should be considered for redundancy but they are not the defining factor.

In the event of an employees attendance record or punctuality being a reason to make someone redundant, employers should take care not to discriminate against employees with disabilities.

Employers who want to make their employees redundant can be held responsible and even face legal action if the individual was done so in a discriminatory manner. If the reason for redundancy is justifiable, you can feel more confident about your decision.

In light of this, it’s crucial that managers act fairly and consistently. That means making all decisions using evidence in the written form, like sick notes, performance appraisals, or disciplinary records. Doing so will ensure that all employees are treated the same.

It’s also advisable to have more than one person involved in each assessment. These people should be familiar with the employee and their performance history, it’s pivotal that this is done well.

Unfair Redundancy

Redundancy can be seen as unfair if a worker was selected in regarding any one of these criteria. See our redundancy guide for more info on what happens in this situation.

This is what’s considered an automated unfair advantage. If you are making redundancies, the one exception to giving a reason is when it’s not the primary reason. So if employees have been made redundant due to restructuring then this wouldn’t be unfair unless one of the factors listed were a factor in an employee being selected for redundancy.


Terminating after September 2021, the furlough initiative has helped companies help workers through tough economic periods.

There’s been a lot of uncertainty with the federal shutdown over recent weeks and employees who have been furloughed but with pay may be wondering what they can do.

Personally, I don’t think it’s fair to put someone on furlough and then make them redundant. Furloughed staff are eligible for the same redundancy package as everyone else, and still receive their entire pay while on their notice period.

As they are still employed, federal staff are legally entitled to the same rights as any other employee. They also enjoy fair redundancy and protection against discrimination and unfair dismissal.

As a precautionary measure, employers should evaluate all other alternatives before deciding to either make furloughed employees redundant or allow those who have worked for the business for more than two years to present a claim for unfair dismissal.

Supporting you through redundancy

Accessibility of employment law has never been more prevalent, meaning that employees are more likely to realise when their employers don’t follow the correct redundancy procedure.

If your organisation is considering layoffs or has already done so, we can make sure that you are familiar with legislation to ensure the process is fair. They’ll also identify legal issues and make sure whatever process you put in place is lawful.

Our expertise can also help businesses navigate the difficult process of furloughed staff becoming redundant.

Appealing your unfair dismissal

If you disagree with your redundancy, you should have a look at your contract or work rules. There may be time limits, but the best time to act is straight away.

I’ve been unfairly chosen for redundancy, and I want to put the situation right by receiving appropriate notice, a selection of other posts within the same organisation that match my competence and qualifications, and compensation.

Getting help from the experts

If your response from Human Resources is not satisfactory, you may want to speak to your union rep. They have a better understanding of how your predicament satisfies the needs of their clients and may be able to help you better suit them.

Settling disputes early

If the situation is difficult and you think you have a strong case, it’s always worth opting for Acas mediation. It’s free of charge to use and if your employer agrees, it could save you from having to take your claim to the Employment Tribunal.

You do not have to accept this. You need to tell Acas right away because the time limits are strict and it won’t work if you don’t reach them.

Taking your claim to an employment tribunal

If you think your day in court is still to come, you may be able to have your case tried by an Employment Tribunal.

If you were unhappy with the outcome of your employment tribunal case, then you will be happy to know that there will be no fees.

Staff turnover

Employers and job seekers alike know their legal rights. It’s possible for your employer to replace you by employing a new staff member, even if that means sacking you. The role could be different, or the employer might move your position and location to another part of the company.

This can be a hard situation to know what recourse you have, if any. If you feel that you have been treated unfairly under your contract, it’s worth making sure of your options by consulting with a lawyer like