What gives you leverage
- The strength of your claims. A poor process, a weak reason for dismissal, discrimination or whistleblowing all raise the value.
- The employer's need for certainty. Employers pay to avoid a tribunal claim, management time and publicity.
- Timing. Offers made before a restructure, a disciplinary outcome or a deadline are often more flexible.
- Evidence. Emails, grievance records and a clear timeline make your points harder to dismiss.
What you can ask for besides money
- An agreed reference and an agreed announcement to colleagues
- Your leaving date, garden leave or payment in lieu of notice
- Payment for untaken holiday and any bonus or commission due
- Keeping your laptop or phone, or outplacement support
- A mutual non-disparagement clause, not just one that binds you
- A higher contribution to your adviser's fees
Tax: the £30,000 rule
A genuine compensation payment for losing your job can usually be paid with the first £30,000 free of income tax and National Insurance. Notice pay, holiday pay, salary and bonuses are taxed in the normal way, even if they are paid as part of the settlement. Check how the agreement splits the payment, because the split affects what you actually receive.
How to negotiate
- Ask for the offer in writing and take time to read it. The Acas Code says you should normally have at least 10 calendar days to consider it.
- List your potential claims and work out roughly what each might be worth.
- Reply in writing, marked "without prejudice", with a clear counter-proposal and short reasons.
- Keep the tone calm and factual. Threats rarely help; a credible claim does.
- Before you sign, get advice from an independent adviser. The agreement is not binding without it.
Mistakes to avoid
Do not sign anything on the spot, however much pressure there is. Do not resign before you have the agreement. And if your employment has already ended, remember that negotiating does not stop the tribunal time limit. Contact Acas in time to protect your position while talks continue.