Settlement Agreements, Redundancy & Exits

Leaving an organisation, whether through resignation, redundancy, or a settlement agreement, can often be a stressful. Career Matters provides expert outplacement support to help you smoothly transition to your next employment opportunity. Our outplacement programmes offer a positive experience, helping you evaluate your options, make proactive changes, and move into a new role more effectively.

A settlement agreement is a legally binding contract between you and your employer outlining the terms of your departure. It often includes:

• Notice period details, including duration and whether you’ll work through it
• Final salary payments and timing
• Additional payments such as bonuses or compensation for unused leave
• Outplacement (career transition) support to help you transition into a new role
• Non-compete clauses and any restrictions on future employment
• References and any agreed announcements

See also: What is Outplacement and Managing Redundancies

By signing, you agree to waive future claims against your employer, and the agreement becomes legally binding.

Employers must ensure that settlement agreements are clear, fair, and understandable. They typically offer compensation as part of the agreement and usually fund independent legal advice for the employee. For assistance in finding an employment lawyer who specialises in settlement agreements, visit our partners section.

Negotiation is essential, and the initial offer may not be the best possible outcome. Set your priorities, be willing to compromise on smaller points, and work with your employment lawyer, who will guide you on structuring payments in a tax-efficient way. Key tips include:

• The first £30,000 is generally tax-free (please seek advice as this could change).
• Ask for outplacement support to be included. It can accelerate your return to work, especially if you’re in a senior role or stayed with an employer for a long time, as finding a new position may take longer. A senior manager, for instance, may take six months to find a new position.
• Your employment lawyer can advise on making the payments as tax-efficient as possible. Note that outplacement support is tax-free within a settlement agreement and does not count towards your £30,000 allowance.
• Carefully review any restrictions on future work, as they might limit your options for joining competitors or starting your own business.

Outplacement services offer vital support, helping you assess your options, build a strong job search strategy, and receive tailored assistance with your CV and LinkedIn profile. They also make sure you make sure you are feeling positive and ready for interview, and provide industry insights, all tax-free within a settlement agreement—saving you money if included upfront.

At Career Matters, whilst we cannot provide legal advice, we can discuss how outplacement support could benefit you, recommend the most suitable programme, and advise on incorporating it into your agreement cost-effectively. We’ll help you take control of your career transition with confidence. Speak to Julie on 07881 584662 or complete the contact form below.