Employment Law

What to do if you’re offered a Settlement Agreement – a free guide for employees

May 22, 2017

If your employer has offered you a settlement agreement, you may be feeling a range of emotions from relief at leaving a stressful situation to being shocked about being asked to leave your role. Either way, you may well be nervous at the prospect of facing unemployment and concerned about your financial security. That's when we're here to help guide you through the process.

Don’t Panic

You may well have lots of questions and will want to speak to someone as soon as possible.  Many agreements require that you treat them confidentially and you will likely need to help of an experienced employment law expert rather than the very next person you bump into.  Our team of friendly specialist solicitors can explain the terms and effect of the proposed agreement, remove any confusion and ensure that you understand what your options are.

Often, we can help negotiate a better deal for you; improving the financial compensation on offer or the terms of a reference. We can also advise you as to your alternative courses of action, up to and including potential claims against your employer. Making an enquiry to speak to an Employment expert costs nothing and may save you a great deal!

What is a Settlement Agreement?

A settlement agreement is a legal contract between you and your employer which sets out the terms on which your employment with them is ending. This usually involves you receiving financial compensation and brings an end to any potential and on-going claims which you may have against your employer. Completing a settlement agreement means that you will not be able to make a claim to a civil court or employment tribunal for compensation in future.

When are Settlement Agreements used?

Settlement agreements are used in a variety of situations both amicable and unexpected.  Typically they are offered when there is a redundancy situation or if there is suspected misconduct or under-performance. They are also offered where there is a desire for a member of staff to leave discretely so as not to disturb either the remaining staff or raise suspicions outside of the employer organisation. They can also be offered to resolve an employee grievance where other methods may not be appropriate or as a result of a protected conversation.

What does a Settlement Agreement cost?

Generally, your employer will pay for you to take advice on the settlement agreement and, depending on the complexity of the settlement agreement and the circumstances around it, costs are typically in the range of £350-£800 excluding VAT. Remember that for a settlement agreement to be valid you must have received independent legal advice on it and therefore it is in your employer’s interest to ensure such advice is sought.

What should I do next?

If you have been offered a settlement agreement contact us for first free advice. Our specialist team of employment solicitors can guide you through your options and help you to conclude, negotiate or even reject the agreement as appropriate. 

Call us on 0117 929 0451 or email the team to see how we can help your employment issue.

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