Jaguar Land Rover (JLR) has confirmed plans to reduce its global workforce by around 4,000 roles over the next two years, with the reductions expected to fall largely on UK-based head-office roles.
The announcement follows a challenging period for the manufacturer, including increased global competition, US tariffs and the significant disruption caused by last year’s cyber-attack.
JLR has said that it is seeking approximately £1.7 billion in savings over the next two years as it looks to simplify the organisation, improve efficiency and build greater resilience.
The voluntary redundancy programme has principally targeted salaried and management employees. For those affected, however, the important question is now a personal one: if you are offered an exit package, how do you know whether it is a good deal?
Voluntary redundancy is still a financial decision
An enhanced voluntary redundancy package can understandably look attractive, particularly where an employer has indicated that compulsory redundancies may follow on less generous terms.
That does not necessarily mean the offer should simply be accepted.
Employees should understand exactly what they are receiving, what they would otherwise be entitled to and, importantly, what they may be giving up in return.
A package may include statutory or enhanced redundancy pay, notice pay, accrued holiday, bonus or commission payments, pension arrangements and an additional termination payment. For senior employees, there may also be questions concerning shares, share options, LTIPs, restrictive covenants or other contractual benefits.
The headline figure therefore rarely tells the whole story.
Is the redundancy package fair?
There is no single formula for deciding whether a voluntary redundancy or settlement package is reasonable.
A useful starting point is to separate payments you are already entitled to receive from the genuinely additional compensation being offered.
Notice pay, accrued holiday and other contractual sums should not ordinarily be regarded as compensation for agreeing to leave.
The value of any enhanced payment should then be considered in the context of your salary, length of service, contractual entitlements, prospects of obtaining alternative employment and the circumstances surrounding the proposed redundancy.
There may also be circumstances in which an employee has potential employment claims. Questions can arise, for example, about how employees have been selected, whether the redundancy process is genuine and fair, and whether discrimination, whistleblowing or other employment rights are relevant.
That does not mean that every redundancy gives rise to a legal claim. It does mean that an employee should understand their position before agreeing to bring their employment (and potentially their employment rights) to an end.
What if you are asked to sign a settlement agreement?
Employees leaving under voluntary redundancy programmes are often asked to enter into a settlement agreement.
A settlement agreement is a legally binding agreement under which an employee will usually waive specified employment claims against their employer in return for an agreed package.
Independent legal advice is required for a settlement agreement to validly waive the relevant statutory employment claims. However, obtaining legal advice should be more than a box-ticking exercise.
The real question is not simply:
“Can I sign this agreement?”
It is:
“Should I sign this agreement on these terms?”
A specialist employment solicitor can consider the circumstances leading to the offer, the payments being made, any potential claims you may be giving up and whether there is a proper basis for seeking improved financial or non-financial terms.
The non-financial terms matter too
Money is understandably at the forefront of most people’s minds when redundancy is proposed, but the other terms of an exit can be equally important.
An agreed reference can be valuable when moving into your next role. The wording of internal or external announcements may matter to senior employees.
Restrictive covenants can affect where you are able to work next, while bonus, commission, shares and long-term incentive arrangements may depend upon the precise termination date or the circumstances in which you leave.
These provisions should be considered as part of the overall package rather than as an afterthought.
Take advice before making the decision
Large-scale redundancy announcements understandably create uncertainty. There can also be pressure to make a decision quickly, particularly where an enhanced voluntary package is contrasted with the possibility of less favourable compulsory redundancy terms later.
My advice is simple: make the decision on the basis of your own circumstances, not simply the headline package.
Understand what you are already entitled to receive. Understand what additional compensation is genuinely being offered. Understand what rights you are being asked to give up. Then decide whether the overall package represents a sensible outcome for you.
Have you been affected by the JLR redundancy programme?
Magara Law is a specialist employment law firm advising employees on redundancy, settlement agreements and workplace disputes.
If you have received a redundancy proposal or settlement agreement from Jaguar Land Rover, or from another employer undertaking a redundancy programme, we can review the proposed terms, advise you on your legal position and, where appropriate, negotiate on your behalf.
For most settlement agreements, employers will commonly make a contribution towards the cost of obtaining the required independent legal advice.
Contact Magara Law to arrange a consultation with one of our employment law specialists before agreeing your exit terms.
Call 01869 325 883, email hello@magaralaw.co.uk or book your consultation direct. Once you have scheduled your consultation, subscribe to our YouTube channel and follow us on social media for all the latest employment law updates and information you need.
This article provides general information only and does not constitute legal advice.
