I have been employed for 5 years, and my employer has just told me that I am not part of the company’s future and I should go home and wait for them to send me a Settlement Agreement. Has my employer done anything illegal?
As an employee, with more than two years continuous service, you have a variety of statutory and common law employment rights, including the right not to be unfairly dismissed. The only way that an employer can reliably be sure that you don’t bring any claims in the Employment Tribunal for a breach of those rights, is to get you to sign a statutory Settlement Agreement after taking advice from an independent legal adviser.
If your employer had dismissed you without warning and without following the correct procedure; you would have a very strong claim for unfair dismissal. However, arguably in this scenario, your employer has not yet done anything unlawful, because they have not actually dismissed you. They have simply sent you home pending agreement on a Settlement Agreement that will include the termination of your employment.
You can of course choose to reject the Settlement Agreement. In that situation, your employer will either have to accept you back at work (which will be very awkward for everyone!) or start a procedure to terminate your employment on a fair and legal basis. This could be very time consuming for the employer, particularly because they will now have to be very careful to make sure they get everything correct to avoid an argument that the process was predetermined and you never had a real chance to defend yourself. This is therefore potentially good incentive for your employer to agree to any request that you want to make to renegotiate the terms of the Settlement Agreement.