Employment Law Settlement Agreements

Settlement agreements are legal contracts between the employer and employee, usually made at the end of the employment relationship to agree the terms on which the employee will depart. If your employer offers you an agreement these are the most important things to consider:

1. Ask for it in writing
   Employers sometimes try and discuss terms informally and then say that they will put something down in writing once everything is agreed. If you agree to negotiate like this, you might find yourself faced with terms that you have not discussed, or which don’t reflect what was said in the conversation. Make sure you ask for any offer to be made in writing before you consider it and that you do not agree to anything until you see it.
2. Do not agree to anything too quickly
   An employer will often try and push an employee to agree terms by setting a deadline for acceptance or push them to agree terms before they see the full written agreement. If the terms offered are fair, your employer should give you enough time to consider it properly and get legal advice. If you feel yourself pressured to agree without seeing the full agreement in writing or have to agree terms quickly, ask yourself (or your employer) why they are in such a hurry.
3. Get legal advice
   Legal advice is necessary to have a binding agreement. It is usually helpful to get legal advice as early as possible. A lawyer will be able to advise you on your legal position, what a reasonable offer is, what you should be looking for and tactics you can use in negotiation. Do not expect your employer to be willing to change what they’re offering you if you only get advice from your lawyer after you’ve said you accept their offer.
4. But be careful who you go to
   If you are unsure about taking the offer, make sure you find a firm who will do more than just explain what the agreement means, but will help you with negotiations and advise on your legal options. If you cannot reach agreement, you need a firm who are able to represent you in bringing a legal claim.
5. Make sure the basics are included
   When you get a written agreement, it should say: when your employment is ending (if it is ending); how much you will be paid to settle any claims you have or are getting in redundancy; what you are getting for notice pay or whether you will work your notice; that you will be paid for untaken holidays; and most importantly when you will receive payment. The agreement should be expressed in full and final settlement of all claims, but should exclude any claims to enforce the agreement, pension rights or any personal injury claim you might have in the future.
6. And read the small print
   Agreements can be long and complicated and include unexpected clauses. Employers sometimes include clauses preventing you working for a competitor for a period after you have left. Make sure you get advice from a lawyer about anything you are unsure about before telling your employer that you agree to it. Check everything that you have discussed and have been promised is included in the agreement if it is not your employer might not have to do it.
7. Think about what you want
   Although agreements usually contain certain clauses there is often flexibility to include additional items. For example, do you want a reference and what do you want it to say? Do you want to be released from any post termination restrictions? Do you want to go on garden leave rather than working your notice? Your employer might not agree to everything, but if you do not ask you won’t get it and so you should always think carefully about what you want to ask for before going into the negotiation.

If you would like to discuss how we can help you with your settlement agreement please contact us on 0208 446 6223 or enquiries@sr-law.co.uk