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Sainsbury’s Job Cuts: Settlement Agreements and Employee Rights

Jan 28

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man with  hands on woman's shoulders

 

Sainsbury’s has announced plans to cut 3,000 jobs across the UK as it closes its hot food counters and cafés while also reducing senior management positions by 20%. The decision comes as the supermarket faces mounting labour costs and seeks to streamline its operations.


Simon Roberts, Sainsbury’s chief executive, said the job cuts were part of the company’s ongoing efforts to reduce costs by £1bn as the business navigates a “particularly challenging cost environment.”


The announcement follows warnings from major UK retailers that they may be forced to cut thousands of jobs and raise prices due to increased employer national insurance contributions, estimated to cost businesses an additional £25bn and a 6.7% rise in the national minimum wage.


Although Sainsbury’s did not directly attribute the job cuts to the rise in employer national insurance, the £140m increase in its wage bill from April 2025 is believed to be a contributing factor.


Why Settlement Agreements Are Essential


Sainsbury's has not publicly announced any plans to offer settlement agreements as part of its restructuring and job cuts. Typically, in redundancy processes, companies either follow statutory redundancy protocols or negotiate enhanced packages that may include settlement agreements for certain employees, depending on their role and circumstances.


Where settlement agreements are offered they will need to be comprehensive and fair, providing clarity and support for those impacted.


Settlement agreements can serve as a vital tool in managing transitions during restructuring. These legally binding documents can outline the terms of departure for employees, ensuring both parties are clear on rights, responsibilities and entitlements. For employees, they offer assurance of financial compensation, support services and any additional benefits while also helping to avoid potential legal disputes.


To handle such processes effectively and compassionately, businesses should:


  1. Engage Legal and HR Teams: Draft agreements that align with legal standards and best practices while being tailored to the needs of individual employees.


  2. Ensure Fair Compensation: Settlement agreements should include appropriate financial compensation to ensure employees have financial security as they transition.


  3. Offer Career Support: An additional form of support to affected employees is providing access to outplacement services, career counselling and skills training to help individuals find new opportunities.


  4. Maintain Open Communication: Actively engage employees and union representatives to ensure that concerns are heard and addressed.


  5. Facilitate Swift Implementation: Settlement agreements should be processed efficiently to minimise uncertainty for employees.


Employees impacted by the restructuring are encouraged to:


  • Engage with an independent Employment Solicitor: We at Magara can help with advising you on the terms of your settlement agreement at no extra cost to you as the client.


  • Utilise Available Resources: Take advantage of career support and training programs designed to help you take your next steps confidently.


 

Call a specialist employment lawyer  


Magara Law is an employment law firm in Bicester, Banbury, Reading and Paddington, London, and services clients nationwide. 


For more information or to contact our employment law team at Magara Law, call 01869 325 883 or email roy@magaralaw.co.uk.





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