Whitbread’s recent announcement that it plans to close, convert, or sell a significant number of its restaurant and pub sites has created uncertainty for thousands of workers across the UK hospitality sector. Well-known brands including Beefeater, Brewers Fayre, Table Table and Bar + Block are all expected to be impacted as the company restructures its operations and focuses increasingly on its Premier Inn hotel business. Reports suggest that approximately 3,800 jobs could be affected nationwide.
For employees, announcements like these are often deeply worrying. Questions quickly arise about redundancy pay, consultation rights, future employment opportunities, and whether they may be asked to sign a settlement agreement.
At Attwells Solicitors, we understand how stressful workplace restructures can be. Our employment law team regularly advises employees who are facing redundancy or negotiating settlement agreements, helping them understand their rights and make informed decisions about their future.
Whitbread’s Restructuring Plans Explained
Whitbread has stated that the changes form part of a wider strategy to focus more heavily on expanding its Premier Inn brand while reducing reliance on underperforming restaurant sites. Many of the affected premises are expected to be converted into additional hotel rooms, sold to third parties, or closed entirely.
The company has pointed to several economic pressures contributing to the decision, including:
- Rising labour costs
- Increased employer National Insurance contributions
- Higher business rates
- Inflation affecting operational expenses
- Changing consumer spending habits
- Ongoing challenges within the hospitality sector
Unfortunately, Whitbread is not alone. The UK hospitality industry has faced significant financial pressure in recent years, with many operators struggling to balance rising costs alongside changing customer behaviour. As a result, restructures, redundancies and business closures have become increasingly common across pubs, restaurants and leisure businesses.
While businesses may have legitimate commercial reasons for restructuring, employees still have important legal protections under UK employment law.
How Closures Can Affect Employees
When businesses close venues or reduce operations, employees may face several possible outcomes, including:
- Compulsory Redundancy
- Redeployment to another location
- Reduced working hours
- Changes to employment terms
- Voluntary redundancy (normally requiring a settlement agreement to be signed)
For many employees, the uncertainty itself can be one of the most difficult aspects of the process. Workers may be left wondering whether they should accept an offer, challenge a decision, or seek legal advice.
Every situation is different, and the correct course of action will depend on factors such as length of service, employment contract terms, age, role, and the way the employer conducts the redundancy process.
What Is a Settlement Agreement?
A settlement agreement is a legally binding contract between an employer and an employee which is commonly used to bring employment to an end on agreed terms.
Under the agreement, the employee will usually receive compensation or other benefits in exchange for agreeing not to pursue legal claims against the employer.
Settlement agreements are frequently used during:
- Redundancy exercises
- Business restructures
- Workplace disputes
- Senior employee departures
- Performance-related exits
- Mutual terminations
Importantly, settlement agreements are only legally valid if the employee receives independent legal advice before signing. This requirement exists to ensure employees fully understand the rights they may be giving up.
Why Employers Use Settlement Agreements During Redundancies
In large-scale redundancy situations, employers often use settlement agreements to reduce the risk of future legal disputes and the amount of management time and resource spent administering the redundancy process.
From the employer’s perspective, settlement agreements can provide certainty, speed and finality. From the employee’s perspective, they may offer enhanced financial terms beyond basic statutory redundancy entitlements.
However, not all agreements are equal. Some employees may receive stronger financial packages than others depending on factors such as:
- Length of employment
- Seniority
- Potential legal claims
- Negotiating position
- Existing contractual rights
Employees should never feel pressured to sign immediately. Once signed, settlement agreements are generally full and final.
What Might Be Included in a Settlement Agreement?
Settlement agreements can contain a wide range of clauses. Common provisions include:
Financial Compensation
The agreement will normally set out what payments the employee will receive, such as:
- Statutory redundancy pay
- Enhanced redundancy payments
- Notice pay
- Accrued holiday pay
- Bonuses or commission
Understanding how these payments are calculated is extremely important. In some cases, employees may be entitled to more than initially offered.
Tax Treatment
Certain termination payments may potentially benefit from favourable tax treatment, while others remain taxable.
The agreement should clearly explain:
- Which payments are subject to PAYE deductions
- Which sums may fall within the £30,000 tax free exemption
- When payments will be made
Mistakes regarding tax treatment can create complications later, so obtaining legal advice is essential.
Waiver of Claims
One of the most important sections of any settlement agreement is the waiver clause.
This usually states that the employee agrees not to pursue claims such as:
- Unfair dismissal
- Discrimination
- Breach of contract
- Unlawful deduction from wages
- Redundancy pay
Employees should fully understand which rights they are giving up before signing.
References
Many agreements include an agreed reference.
This can be particularly valuable where employees are seeking new work quickly following redundancy.
Confidentiality Clauses
Employers often include confidentiality obligations preventing disclosure of:
- Settlement terms
- Internal business matters
- Workplace disputes
Some clauses may be broader than necessary, so careful review is important.
Restrictive Covenants
Senior employees may also encounter clauses restricting future employment activities, such as:
- Working for competitors
- Soliciting clients
- Contacting former colleagues
These restrictions should always be assessed carefully and any further restrictions over and above what is already contained in the employee’s contract of employment should be avoided wherever possible.
The Importance of a Fair Redundancy Process
Even where a business has genuine reasons for redundancies, employers must still follow fair legal procedures.
This may include:
- Meaningful consultation with affected employees
- Application of fair selection criteria
- Exploring alternative employment opportunities
- Providing an opportunity to appeal against any dismissal
Where large numbers of redundancies are proposed, collective consultation obligations may also arise.
Failure to follow a proper process can potentially lead to claims including:
- Unfair dismissal
- Failure to consult
- Discrimination
- Protective awards
Whitbread has previously faced scrutiny regarding consultation processes during earlier restructuring exercises.
Employees who believe procedures have not been followed correctly should seek legal advice promptly.
Should Employees Negotiate Their Settlement Agreement?
Many employees assume settlement agreements are non-negotiable. In reality, there is often scope to improve terms.
Depending on the circumstances, negotiation may achieve improvements such as:
- Higher compensation payments
- Better references
- Extended benefits
- Waiving of post-termination restrictions
- Outplacement counselling
Employers may be particularly willing to negotiate where there are potential legal risks or procedural concerns.
Seeking legal advice early can therefore make a significant difference.
How Attwells Solicitors Can Help
At Attwells Solicitors, our expert employment law team regularly advises employees across the UK on settlement agreements, redundancy rights and workplace disputes.
We can help by:
- Reviewing settlement agreements in detail
- Explaining your legal rights clearly and practically
- Advising whether the compensation offer is fair
- Negotiate improved terms on your behalf
- Advising on restrictive covenants and confidentiality clauses
- Supporting you throughout the process
In pretty much all cases, employers contribute towards the employee’s legal fees in obtaining advice on terms and effect of the agreement.
Here at Attwells Solicitors we cap our fees at the contribution provided by your employer, so as to provide you with a completely FREE legal service.
Final Thoughts
Whitbread’s planned closures reflect the wider challenges currently facing the UK hospitality industry. Whilst businesses may need to restructure to remain commercially viable, employees affected by these decisions still have important legal protections.
If you are facing redundancy, have been offered a settlement agreement, or are unsure about your rights following a workplace restructure, obtaining legal advice early can help protect your position.
At Attwells Solicitors, we provide clear, practical employment law advice designed to help employees move forward with confidence during uncertain times.
To speak with our employment law team about a settlement agreement or redundancy matter, contact Attwells Solicitors today.
