UK Recruitment Glossary
Severance
In recruiter context
Severance and redundancy overlap in UK usage. The statutory minimum redundancy payment is the floor; severance usually means anything enhanced above that. Settlement agreements (formerly compromise agreements) are the legal vehicle: you sign away your right to bring tribunal claims in exchange for a payment. The first £30,000 of a genuine ex-gratia termination payment is tax-free in the UK; anything above that is taxed as income. Always get independent legal advice — the employer pays for it as part of the deal. Negotiate: the first offer is rarely the final number.
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