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Redundancy by sectorManufacturing redundancy: your rights, pay and settlement agreements
Manufacturing redundancy, collective consultation thresholds, enhanced union-negotiated terms and how settlement agreements resolve site closure disputes.
Manufacturing redundancies typically follow site closures, production line restructuring, or the loss of major contracts, and often involve large numbers of employees at a single location, which brings collective consultation rules into play. Where an employer proposes 20 or more redundancies at one establishment within a 90 day period, it must consult employee representatives, often through a recognised trade union, for a minimum period before any dismissals take effect. Some manufacturers, particularly larger or unionised employers, offer enhanced redundancy terms above the statutory minimum as part of collective agreements. Settlement agreements are used for individual exits and for resolving disputes that arise alongside a wider restructuring.
Key points
- 20 or more redundancies at one site trigger a minimum 30-day collective consultation period, rising to 45 days for 100 or more.
- Recognised trade unions often negotiate enhanced redundancy terms through collective agreements.
- Settlement agreements are more common for individual exits than for mass site closures.
- Unfair selection for redundancy is a common source of dispute resolved through a settlement agreement.
Settlement agreements in manufacturing
Settlement agreements in manufacturing are typically used for individual exits, senior roles not covered by collective agreements, or to resolve disputes that arise during a wider restructuring, such as unfair selection complaints. Where a union is recognised, collective consultation and any agreed enhanced terms usually apply to the wider workforce rather than a settlement agreement. As with any sector, a settlement agreement requires independent legal advice before it is binding, with the cost normally met by the employer.
Been offered a settlement agreement?
If your manufacturing employer has offered you a settlement agreement as part of a redundancy, we will review it the same working day and tell you honestly whether the offer is fair. Free to you when your employer pays our fee, which is the case in nearly every UK settlement agreement.
Manufacturing redundancy: frequently asked questions
Does my manufacturing employer have to consult a union about redundancies?
If 20 or more redundancies are proposed at one site within 90 days, the employer must consult appropriate representatives, which will usually be a recognised trade union where one exists, for a minimum statutory period before dismissals take effect. Failing to consult properly can itself give rise to a claim, separate from any redundancy pay dispute.
Am I entitled to more than statutory redundancy pay in a factory closure?
It depends on whether your employer has a collective agreement or company policy providing enhanced terms. Many larger or unionised manufacturers do, particularly for longer-serving staff, but this is not guaranteed and should be checked against your contract or any agreement your union has negotiated with the employer.
Can I challenge how I was selected for redundancy in a manufacturing restructure?
Yes, if selection criteria were applied unfairly, inconsistently or discriminated against you, this can be challenged, sometimes leading to a settlement agreement being offered to resolve the dispute. Evidence of how selection scoring was carried out compared with colleagues in your pool is usually central to assessing whether a challenge has merit.