What Should You Do When You Get A Settlement Agreement?

Three Choices

If you have been offered a settlement agreement, then you will need to think very carefully about what to do.

You basically have three choices.

1. Sign and accept the settlement agreement
2. Reject the settlement agreement
3. Try and negotiate a better deal

1. Sign and accept the settlement agreement

If you do accept and sign the settlement agreement, then you will usually receive a payment in lieu of your notice period and a tax-free lump sum compensation payment in return for you agreeing to your employment being terminated. The settlement agreement will require you make various legal promises, including not to issue any legal proceedings against your employers in the future, to keep your employers information confidential, to return all company property, to not make any critical or derogatory comments about your employers, and to keep the existence and the terms of the settlement agreement confidential. Once your employment is at an end then you are on your own. Hopefully you will have received sufficient compensation to sustain you for long enough to find another job.

2.Reject the settlement agreement

If you refuse to sign the settlement agreement, then you face the risk of your employers attempting to forcibly terminate your employment. If your employers are successful in terminating your employment then you will not receive the enhanced compensation payment of offer and will only receive the minimum of what you are legally entitled to (such as pay in lieu of notice and if applicable, basic statutory redundancy). However, you do have the right to issue legal proceedings against your employers in a court or tribunal the future. However, this is not an easy thing to do and can be a stressful, challenging and expensive option to pursue.

3. Negotiate a better deal

Just because you have been offered a deal does not mean that it cannot be improved. It is always worth at least considering whether to ask for a better deal from your employers. Although there always a risk of any settlement agreement being withdrawn by your employers, in most cases, the worst that will happen is they will say no.

Seeking legal advice

If you wish to accept the terms of the settlement agreement, then all settlement agreements come with a clause that states that you must receive legal advice from a solicitor (or other qualified lawyer) prior to you signing the settlement agreement and that the solicitor must also provide a certificate that the terms of the settlement agreement have been fully discussed and agreed by you. We can help you with this. All you need do is give us a call or contact us online.

Why do I need a Settlement Agreement?

For many, entering into a settlement agreement, can be a positive experience. It can ensure that an employee receives more money (often tax free) than they normally would have received and ensures that their employment is brought to end seamlessly allowing them to move on with life. A reference can also be provided and a person’s CV can also be kept clean enabling them to be able to find alternative employment without the stain and baggage of a bitter, messy and long drawn out dispute and forced termination..

Will I know I am Being offered a Settlement Agreement?

In many circumstances, before offering a settlement agreement, employers will enter into something called ‘pre-termination negotiations’. These are also known as ‘protected conversations’ and they allow for employers to have open and frank “off the record” conversations with an employee about their employment and possible termination.

If you are in a “protected conversation” meeting, it is important to obtain as much information as you can as to your employers situation and why they are considering offering a settlement agreement and how and severance and termination package is calculated.

These protected conversations are off the record and are completely protected, and anything that is discussed in these meetings cannot usually be used by either party in an unfair dismissal claim. There are however some exceptions to this, for example in discrimination cases and whistleblowing cases.

What Should I Do Next?

When you are offered a settlement agreement, and are minded to accept the terms offered then please give us a call on 01536 276300 and we would be delighted to help.

At Seatons, one of our friendly team who will be able to tell you the next steps. We pride ourselves on being known as the ‘friendly professionals. We also offer a fast and outstanding legal service to get matters sorted out with as little fuss as possible.

The legal costs for signing a settlement agreement are usually paid by your employers. At Seatons we will always try and work and ensure that our costs are the same as being offered by your employers.

We understand that this can be a difficult time for you and your family. We endeavour to be supportive, friendly and most importantly use our expertise to ensure that you get the result you deserve.