Redundancy vs MARS in the NHS

1. What Is Redundancy in the NHS?

Redundancy happens when:

• Your role is no longer required
• The organisation is restructuring
• Services are closing or merging
• Funding has been reduced

Redundancy is a formal legal process.

Under NHS Agenda for Change and national terms:

• Your employer must consult with you
• They must explore redeployment options
• They must follow a fair selection process
• You may be entitled to a redundancy payment
• Pension access may be triggered depending on age and service

Redundancy is about the job disappearing.

2. What Is MARS?

MARS stands for Mutually Agreed Resignation Scheme.

It is commonly used by NHS organisations, including bodies overseen by NHS England.

MARS is:

• Voluntary
• Application-based
• Subject to employer approval
• Usually offered during cost-saving exercises

Your role does not have to disappear under MARS.

You agree to leave.
The employer agrees to pay compensation.

In most cases, you will be asked to sign a settlement agreement.

3. Redundancy vs MARS — Structured Comparison

Trigger

• Redundancy → Role no longer needed
• MARS → Financial or organisational strategy

Voluntary?

• Redundancy → Can be voluntary or compulsory
• MARS → Always voluntary (but employer can refuse your application)

Consultation Required?

• Redundancy → Yes
• MARS → No formal redundancy consultation

Redeployment?

• Redundancy → Must be considered
• MARS → Not required

Payment Type

• Redundancy → Statutory or contractual redundancy payment
• MARS → Exit compensation (often capped)

Settlement Agreement?

• Redundancy → Not always required
• MARS → Almost always required

4. Pension Implications

If you are a member of the NHS Pension Scheme, the financial impact can be significant.

Key variables:

• Pension section (1995 / 2008 / 2015)
• Age
• Length of service
• Whether employer strain costs are paid

In some redundancy cases (especially age 55+), early retirement benefits may apply.

Under MARS, pension access is not automatically enhanced.

Always obtain a pension estimate before signing anything.

5. Why Settlement Agreements Matter

Under MARS — and sometimes in redundancy exit deals — you will likely be asked to sign a settlement agreement.

This is legally binding.

By signing, you typically:

• Waive employment tribunal rights
• Confirm you will not bring claims
• Agree to confidentiality clauses
• Accept restrictions on future claims

You must receive independent legal advice before signing for it to be valid.

Do not rely on HR explanations alone.

6. Common Risks Staff Overlook

• Pension reductions
• Re-employment restrictions within the NHS
• Clawback clauses
• Tax treatment misunderstandings
• Pressure to decide quickly
• Losing leverage in negotiation

Once signed, settlement agreements are extremely difficult to undo.

Important: If You Have Been Offered a Settlement Agreement

If you have been offered:

• MARS
• A voluntary exit package
• A redundancy deal with enhanced terms
• Any settlement agreement

You should seek specialist legal advice before signing.