If you have been offered a Settlement Agreement by your employer, you may be unsure whether to sign it or to try to negotiate a better offer. You may also be wondering whether you should reject the Settlement Agreement entirely and make a claim to an Employment Tribunal. Our specialist employment lawyers can offer the clear, practical guidance you need to make the right choice for your short-term and long-term interests.
We know how confusing and stressful dealing with these issues can be, so we can talk you through every aspect of any Settlement Agreement you have been offered. We will give our expert opinion on whether the Agreement is fair under the circumstances or whether we believe you can get a better settlement by renegotiating or taking the matter to a Tribunal.
We advise employees of all levels, but have particular expertise with high value Settlement Agreements for Senior Executives, VPs and other senior employees.
With many years of experience dealing with Settlement Agreements for redundancy, dismissals and a wide range of employment disputes, our team can give you confidence that you are taking the right action to get the best settlement for you under the circumstances.
Common questions about settlement agreements
Why do I have to sign a Settlement Agreement?
If you have been involved in a dispute with your employer, or if you have been made redundant, your employer will probably ask you to sign a Settlement Agreement.
Settlement Agreements are used by employers to draw a line under the dispute and ensure that employees who sign them cannot bring any claims against them in the Court or tribunal, now or in the future. In return for you giving up your rights to bring most claims, you will receive a compensation payment and certain additional benefits. If you did not sign the Agreement, your employer would most probably not be paying you as much.
Why do I need to have the Agreement signed by a solicitor?
Settlement Agreements are only legally binding once you have received advice from an independent legal adviser (e.g. a solicitor or certified trade union officer) on the terms of the Settlement Agreement and the effect of signing it on your employment rights.
Are Settlement Agreements legally binding?
As long as the right process is followed, a Settlement Agreement should be legally binding on both the employer and employee who sign the Agreement.
As mentioned above, the employee needs to be given independent legal advice by an appropriate adviser for the Agreement to be binding and the following conditions must also be met:
- The Agreement must be in writing
- It must relate to a specific complaint or issue
- The employee’s adviser must be identified in the agreement
- The applicable statutory conditions regulating the settlement agreement must be stated in writing in the agreement
- The employee must be given a reasonable amount of time to consider the agreement before signing
- The employee must not be pressured or coerced into signing
How long do I have to decide whether to sign a Settlement Agreement?
Your employer is required to give you a ‘reasonable’ amount of time to consider the agreement before signing or rejecting it. ACAS (Advisory, Conciliation and Arbitration Service) guidelines suggest employees should be given a minimum of 10 days to make a decision.
What are your Settlement Agreement fees?
We charge a minimum fee of £350 plus VAT for advising on Settlement Agreements. This will usually cover the time spent in a meeting for up to one hour, where we will give you independent legal advice on the terms of the Agreement, advise you briefly on the potential claims you may have and deal with the formalities associated with signature of the Agreement. This fee, or at least part of it, will often be paid by the employer as part of the package.
Our charges will exceed the minimum fee for the following reasons:
- the Agreement is less straightforward,
- You ask us to consider other documentation,
- You ask us to get involved in negotiating an improved compensation package, or different wording for the Agreement,
- We provide detailed advice on the prospects of success of your potential claims and likely compensation.
In these circumstances, we will charge you at our normal hourly rates (£225 – £300 plus VAT per hour depending on the solicitor dealing with your case). As part of negotiations, we can ask for your employer to increase their contribution, however they do not always agree. If so, the balance of our fees over the employer’s contribution will be your responsibility.
Will my employer cover the cost of legal advice for a Settlement Agreement?
Your employer will usually only pay their contribution if the Agreement is signed. Therefore, if you meet with us and decide not to sign the Agreement, you will be responsible for our fees in full at our normal hourly rates.
I am not happy with the package on offer. Can I negotiate for a better one?
We will advise you regarding any potential claims that you may be giving up by signing the Agreement. There may be grounds for negotiation if we establish that you will be signing away your rights to bring a substantial claim for compensation.
However, you should bear in mind the costs associated with bringing a tribunal claim and the risk that you may not win. We can never guarantee that negotiations will be successful and your employer will not generally agree to cover the cost of these negotiations.
My reference seems a bit brief. Can I negotiate for a better one?
There is no obligation in law for an employer to provide a reference. Any reference that is provided must be true, accurate and fair. Many employers (particularly the larger ones) are reluctant to provide detailed references and often make it their policy only to give out basic information about job title, dates of employment and reason for leaving.
If you would like us to try to negotiate a better reference for you, we are happy to try. As above, there is likely to be an additional charge to you for this negotiation.
Can I tell anyone about the Agreement?
This depends whether there is a confidentiality clause in the Agreement. We will advise you on what you are allowed to say, if anything, after signing your Agreement and to whom.
Can you represent me if I decide to make an Employment Tribunal claim?
Yes, we can advise you on taking matters to an Employment Tribunal where appropriate, including using early conciliation to reach a pre-Tribunal settlement.
We will advise you where we believe making a claim is the right course of action for your circumstances or where we believe you are likely to be able to get a better outcome by further negotiations with your employer.
You will usually need to start early conciliation within 3 months less 1 day from the date of the incident your claim relates to, unless you are claiming statutory redundancy pay or equal pay, in which case the deadline is 6 months less 1 day.
If you are unable to reach an agreement through early conciliation, you will have at least one month after early conciliation ends to bring a claim to an Employment Tribunal.
Our expertise with Settlement Agreements for employees
Having represented both employees and employers in settlement negotiations for many years, our team have a strong understanding of what can realistically be achieved and what represents a fair agreement under a wide range of circumstances.
This experience means we can help you to get the best possible Settlement Agreement or advise you on where making an Employment Tribunal claim may be a more appropriate option.
Our Employment Department is led by Laura Claridge, who has more than 12 years’ experience working with employers and employees at every level, from large corporates to SMEs across a range of sectors. Laura has particular expertise in advising Senior Executives and VP’s in relation to high value Settlement Agreements and exit strategies.
Laura is a member of the Employment Lawyers Association (ELA) reflecting her expertise and commitment to offering excellence in employment law.
Speak to our employment law solicitors in Orpington
For clear, effective advice and representation on a Settlement Agreement or any other area of employment law, please get in touch with our employment law solicitors in Orpington today.