Home/Redundancy/NHS
Redundancy by sectorNHS redundancy: your rights, pay and settlement agreements
Understand NHS redundancy under Agenda for Change, pension options and how NHS settlement agreements work, with independent legal advice usually paid by your trust.
Most NHS staff, from nurses and healthcare assistants to administrators and allied health professionals, are employed under Agenda for Change terms and conditions, which include a contractual redundancy scheme that is often more generous than the statutory minimum. NHS trusts and integrated care boards periodically restructure services, merge departments or close units, and staff at risk of redundancy are usually offered a formal consultation process before any settlement agreement is proposed. Settlement agreements in the NHS are used both for straightforward redundancy exits and for resolving disputes, such as grievances about bullying, performance management or whistleblowing concerns, where a trust wants to end the employment relationship on agreed terms rather than proceed to a tribunal.
Redundancy pay in the NHS: NHS Agenda for Change redundancy terms
NHS Agenda for Change redundancy terms provide a contractual entitlement of one month's pay per year of reckonable service, subject to a minimum and a cap linked to salary, which for most staff is more generous than the statutory scheme. Voluntary redundancy, sometimes badged as a Mutually Agreed Resignation Scheme (MARS), has historically been used to manage NHS workforce reductions before compulsory redundancy is considered. Terms vary between trusts and can change, so staff should check their current employer's position.
Key points
- Agenda for Change redundancy terms usually exceed the statutory minimum for staff with long service.
- NHS trusts must formally consult staff at risk of redundancy before dismissal or a settlement agreement is offered.
- Redundancy or MARS payments are separate from NHS pension benefits, which may allow early access from age 55 in some cases.
- A settlement agreement is often used to resolve NHS grievances or whistleblowing disputes without a tribunal claim.
Settlement agreements in the NHS
Settlement agreements are common in the NHS both for agreed exits during restructuring and for resolving disputes, including capability, conduct or whistleblowing matters, where a trust prefers a clean break to a formal process or tribunal claim. An NHS agreement typically combines a redundancy or ex-gratia payment with an agreed reference and a waiver of claims. Because NHS pay and pension arrangements are complex, staff should have the agreement checked by a solicitor, a cost the trust usually covers.
Been offered a settlement agreement?
If your the NHS 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.
NHS redundancy: frequently asked questions
Is NHS redundancy pay better than the statutory minimum?
For many staff with several years of service, yes. Agenda for Change redundancy terms are calculated at one month's pay per year of reckonable service, subject to a cap, which is usually more than the statutory formula of up to 1.5 weeks' pay per year capped at £751 a week. Exact entitlement depends on your trust's current policy and length of service.
Can I access my NHS pension early if I am made redundant?
Some NHS staff aged 55 or over can have their pension paid early without the usual actuarial reduction if they are made redundant, depending on scheme rules and trust policy. This is a valuable but complex benefit, and how it interacts with any redundancy or settlement payment should be checked carefully before you agree to leave.
Why would I be offered a settlement agreement instead of NHS redundancy?
Trusts sometimes prefer a settlement agreement where there is a dispute alongside a restructuring, such as a grievance, capability concern or whistleblowing issue, because it draws a line under all potential claims in exchange for an agreed payment. It can also be used to agree exit terms, including notice and reference wording, without going through the full redundancy procedure.