How to Negotiate a Redundancy Package

What is and is not negotiable

Start by separating the fixed from the flexible, because arguing about the fixed part wastes credibility you will want later.

Not negotiable:your statutory redundancy pay. It is calculated under a statutory formula on age, length of service and a capped week's pay (£751 from 6 April 2026). Your employer cannot pay you less and has no discretion to pay you more under that heading.

Negotiable: almost everything else. The enhanced or ex gratia element. Notice, and whether it is worked or paid in lieu. The termination date, which can matter for pension milestones, bonus eligibility and share vesting. Accrued holiday. Bonus and commission. Employer pension contributions. Continuation of benefits such as private medical cover. Outplacement support. The wording of your reference. Whether restrictive covenants are waived or narrowed. Who pays your legal fees, and how much.

Where the leverage actually comes from

An employer improves an offer for one reason: because the risk or cost of not improving it is higher than the improvement. Personal circumstances, however genuine, do not change that calculation. Process defects do.

Defective collective consultation

Where an employer proposes 20 or more redundancies at one establishment within a period of 90 days, it must inform and consult employee representatives collectively. The minimum periods before the first dismissal takes effect are 30 days for 20 to 99 proposed redundancies, and 45 days for 100 or more. If it fails, a tribunal can make a protective award.

This is the single most valuable point in 2026, and most employees do not know it. From 6 April 2026 the maximum protective award doubled from 90 days' to 180 days' full pay per affected employee, under changes made by the Employment Rights Act 2025. Full pay here is not capped at the statutory weekly figure. For a well-paid employee that is a very large number, and it is a number your employer's advisers are acutely aware of. If the consultation was rushed, started after decisions were plainly already made, or never happened, the offer on the table almost certainly does not reflect it.

Defective individual consultation or selection

Even below the collective thresholds, a dismissal for redundancy must be fair. The recurring failures are a selection pool drawn to produce a predetermined answer, selection criteria that are subjective or applied by the person the criteria are meant to test, scoring that cannot be evidenced, no meaningful consultation before the decision, and no genuine search for suitable alternative employment. Each is a potential unfair dismissal finding, and each raises the price of your signature.

The redundancy is not really a redundancy

Redundancy has a statutory meaning: broadly, the business is closing, the workplace is closing, or the requirement for employees to do work of a particular kind has ceased or diminished. If your duties are being redistributed to a new hire, or your role is being advertised under a different title, the situation may not be a redundancy at all. That is a materially different negotiation.

An underlying discrimination or whistleblowing issue

Where selection is tainted by a protected characteristic, or follows a protected disclosure, the claim is not an ordinary unfair dismissal claim. Compensation for discrimination is uncapped and can include injury to feelings, and there is no qualifying service requirement. If you think this is your situation, take advice before you engage in any negotiation at all, because how you raise it matters. See settlement agreements and discrimination.

How to actually run the negotiation

1. Work out the floor first

Calculate your statutory entitlement and every contractual sum you are owed regardless of signing. Until you know that number, you cannot tell whether the offer contains any enhancement at all. The calculator will get you most of the way, and enhanced redundancy packages explains how to read the enhancement.

2. Ask questions before you argue

Request the selection pool, the criteria, your scores and the scores of the pool anonymised. Ask what alternative roles were considered. Ask how the enhancement was calculated and whether it is contractual. You are doing two things: gathering the evidence that gives you leverage, and signalling that this will be a considered process rather than an emotional one.

3. Put it in writing, and be specific

A general request for "a bit more" invites a general refusal. A short letter that identifies the specific defect, states what you are asking for, and explains why that figure reflects the risk is far harder to dismiss. Ask for one primary improvement and two or three secondary ones, so there is something to concede.

4. Negotiate the whole package

If the redundancy figure genuinely will not move, because it is a company-wide scheme and moving it sets a precedent, move to the parts that are not part of the scheme. A later termination date. Notice paid without requiring mitigation. A waiver of your restrictive covenants so you can take the obvious next job. An agreed reference annexed to the agreement. A larger contribution to your legal fees. Employers who cannot move on the headline number are often surprisingly flexible on all of these.

5. Get the tax structure right

How the total is allocated between compensation, notice and other elements changes what you actually receive. Post-employment notice pay is taxable as earnings regardless of the label attached to it. Negotiating an extra £5,000 into the wrong column can be worth considerably less than you expect. See the tax guide.

When to stop pushing

Negotiation is not free. It costs time, it can cost goodwill, and in a small number of cases an employer will withdraw an offer and simply run the redundancy process to its conclusion. Stop when the process was genuinely fair, the enhancement is real and calculated on actual pay, you have no viable claim, and the remaining gap is small relative to the risk. A solicitor who tells you every offer can be improved is not advising you, they are selling to you.

The broader principles of settlement negotiation, including what employers will and will not move on, are covered on the settlement agreement negotiation page. This page deals with the redundancy-specific leverage.

Key points

• Statutory redundancy pay is fixed. Everything above it is usually negotiable
• Leverage comes from process defects, not from personal need
• The maximum protective award for failure to consult collectively doubled to 180 days' full pay on 6 April 2026
• From 1 January 2027 the unfair dismissal qualifying period falls to six months and the compensatory cap is removed
• If the headline figure will not move, negotiate termination date, covenants, reference and legal fees
• Compare net, not gross: the tax allocation changes what you receive