We are specialist employment solicitors here at Lincs Law Employment Solicitors. We therefore often advise clients who are unsure whether they have received a Settlement Agreement or settlement offer letter from their employer. If you think you may be in this situation, try not to panic. We are here to help.
What Is A Settlement Agreement?
A Settlement Agreement is a contract between an employer and an employee which, usually, sets out terms for the employee to give up their job, their employment rights and any Employment Tribunal claims they may have in exchange for a compensatory payment from their employer.
Such agreements are offered by employers for many different reasons. For example, a Settlement Agreement could be offered by an employer where:
- There are concerns about an employee’s performance and a Settlement Agreement is offered as an alternative to proceeding with a Performance Improvement Plan (PIP).
- An allegation of misconduct has been made, and a Settlement Agreement is offered as an alternative to proceeding with a disciplinary process.
- A business is facing a redundancy situation, and a Settlement Agreement is offered during (or before) a redundancy consultation process.
- There is an ongoing dispute and/or a Formal Grievance is ongoing. A Settlement Agreement may be offered as an opportunity for the parties to part ways.
Importantly, there are certain formalities that must be completed when entering into a Settlement Agreement, including:
- The Settlement Agreement must be in writing;
- It must clearly set out the intentions of the parties;
- It must set out the claims/complaints being waived;
- The employee must have taken independent legal advice prior to signing; and
- The Settlement Agreement must name the person who provided the legal advice.
A Settlement Agreement is completely voluntary. This means you cannot be forced or made to enter into a Settlement Agreement. If you choose not to enter into a Settlement Agreement, your employment should continue as usual. What this option looks like for you will very much depend on your personal circumstances.
What Does A Settlement Agreement Look Like?
As noted above, a Settlement Agreement is a contract between an employer and an employee which, usually, sets out terms for the employee to give up their job, their employment rights and any Employment Tribunal claims they may have in exchange for a compensatory payment from their employer.
A Settlement Agreement is therefore a lengthy document, usually standing in excess of 10 pages. It will contain various clauses and sub-clauses detailing the proposed terms to be agreed between the parties. These could include headings such as “Background”, “Definitions”, “Termination”, “Waiver of Claims”, “Legal Fees” and “Confidentiality”.
A Settlement Agreement will also have a signature panel i.e., a place where an employee and employer can sign the agreement if they wish to do so. Also, there will be a separate place for the independent adviser to confirm their identity and sign to confirm they have provided independent advice to the employee prior to their signature. This is usually referred to as an “Adviser’s Certificate”.
A Settlement Agreement will also usually be labelled “without prejudice and subject to contract”. This may appear on the front page of the contract or, at the very least, within one of the clauses. This means the documentation is off record and cannot be referred to in the usual course of the employee’s employment or any Employment Tribunal litigation. For more information about this, please see here – https://lincslaw.co.uk/blog/what-does-without-prejudice-mean/
If the document you have received from your employer does not look as described above, you may have only received an initial offer of a Settlement Agreement (sometimes referred to as an “offer letter”) from your employer. If you are in this situation, we are here to help. Please see below.
What Does An Offer Letter Look Like?
Here at Lincs Law Employment Solicitors, we often speak to clients who believe they have received a draft Settlement Agreement. However, their employer has instead only made an initial offer of a Settlement Agreement (without actually providing them with a copy of the full draft agreement). This is usually referred to as an “offer letter”.
The above can understandably make an already stressful process feel even more daunting.
An offer letter will likely be labelled as “without prejudice and subject to contract”. However, in contrast to a full draft Settlement Agreement, an offer letter will likely:
- Be much shorter – usually standing at only one or two pages.
- Only set out the heads of terms offered (i.e., the proposed Termination Date, payments to be made to the employee, the legal fee contribution the employer is willing to cover), not the full contractual terms.
- Not have a signature panel for the employee or employer.
- Not have a signature panel / Certificate for the adviser to sign.
- Contain information about the next steps. For example, requiring the employee to provide an initial response to the settlement offer within a certain time frame.
Each offer letter is very different and bespoke to each employer. Your next steps will depend on your personal circumstances, your employer’s processes and the contents of the letter. However, as a general guide:
- If you are certain you do not want to engage in settlement discussions or leave your employment via a Settlement Agreement, you may wish to decline the offer and not engage in settlement discussions any further.
- If you are minded to explore the idea of leaving your employment via a Settlement Agreement, you can ask your employer for a copy of the draft Settlement Agreement so you can obtain independent advice on its terms.
Importantly, any communication about a Settlement Agreement should be very clearly labelled as “without prejudice and subject to contract” as noted above. For more information about this, please see here – https://lincslaw.co.uk/blog/what-does-without-prejudice-mean/
If you have received an offer letter and do not know what to do, we are here to help.
How Can Lincs Law Employment Solicitors Help You?
We are specialist employment solicitors here at Lincs Law Employment Solicitors. We would be delighted to help you with your Settlement Agreement or offer letter received from your employer.
The First Step – Free Initial Enquiry
The first step is simply to contact us for a free enquiry. We are very happy to help in response to a telephone, email or web enquiry. Please contact us for a no obligation, free consultation. Simply use the contact form, engage in a web chat, email contactus@lincslaw.com or call us on 01522 440512.
We will take some basic information from you including your name, the name of your employer and brief details of your employment issue. We will then be able to discuss your options and how we can assist you further.
If you would like further assistance after our initial free enquiry, the next step is to schedule either a Fixed Fee Consultation or Settlement Agreement appointment with one of our specialist employment solicitors.
The Second Step – Settlement Agreement Appointment or Fixed Fee Consultation
Here at Lincs Law Employment Solicitors, we offer either a Fixed Fee Consultation or Settlement Agreement appointment with one of our specialist employment solicitors.
Settlement Agreement Appointment
If you have received a draft Settlement Agreement from your employer and you are minded to proceed with this route, we will be happy to schedule a Settlement Agreement appointment in person, via telephone or video. More information about our specialist employment solicitors can be found here – https://lincslaw.co.uk/about/our-team/
Before this appointment, we will spend time reviewing the terms of your Settlement Agreement in detail. During our appointment, we will then spend time discussing the following together:
- The circumstances of your situation;
- Any potential Employment Tribunal claims you would be settling if you chose to sign the Settlement Agreement;
- The overall “benefit” of your Settlement Agreement – i.e., what benefits you would be receiving over and above what you would otherwise be entitled to;
- Each of the individual terms of the Settlement Agreement in detail;
- The various options available moving forward.
Our meetings, as above, are scheduled for up to 90 minutes. Our meetings therefore provide you with plenty of time to fully understand your options and make an informed decision moving forward.
Following our meeting, we also confirm our advice in writing to ensure you have a full record of our discussions.
For most people, a Settlement Agreement is dealt with at the first appointment. Subject to your instructions, we can assist you with signing your Settlement Agreement and returning the relevant documentation to your employer. However, we take the time to discuss the workplace circumstances which led to you being offered a Settlement Agreement. This is so we can advise as to the “deal” being offered. If you are not being properly compensated or we consider there any other issues with your Settlement Agreement, we will advise you fully on the alternatives available to you.
An employer will usually contribute towards the cost of you obtaining advice on a Settlement Agreement. For information about our fees, please see here – https://lincslaw.co.uk/fees/settlement-agreements/
Fixed Fee Consultation
A Fixed Fee Consultation is a very comprehensive, bespoke, consideration and assessment of your situation. It starts with your choice of a telephone, face to face or video appointment of up to 90 minutes with the specialist employment solicitor of your preference. During the appointment, your employment law solicitor will:-
- Go through the full background of your situation and review up to 10 items of relevant documentation (By way of example, a document could be a contract of employment, a letter, an email, a report (without appendices), a statement, an Employment Tribunal Claim Form etc);
- Discuss and identify your objectives – what do you want to achieve?
- Identify any Employment Tribunal claims you may have so you know the strength of your position;
- Provide an overview estimate of the value of your claims;
- Discuss any relevant time limits you need to be aware of;
- Identify and advise on the next steps you should take to put you in the best possible position;
- Discuss the funding options available to you if we are able to assist going forward. (More information about possible funding is available on our website at https://lincslaw.co.uk/fees/employees/ ); and,
- After the Fixed Fee Consultation, we will confirm our advice in full and in writing, so you have a comprehensive record of our discussions.
A Fixed Fee Consultation will be more appropriate for you if:
- You are unsure whether you want to leave your employment via a Settlement Agreement route; and/or
- You would prefer a more detailed review of all of your options; and/or
- You have not received a draft Settlement Agreement (for example, only an offer letter) and would like advice at this stage.
More information about our Fixed Fee Consultations, including our fees, can be found here – https://lincslaw.co.uk/fees/employees/
Whilst there are some similarities between Fixed Fee Consultations and Settlement Agreement appointments here at Lincs Law Employment Solicitors, there are some important differences.
Firstly, the background considered for a Fixed Fee Consultation is much more in depth and will consider relevant documentation. For a Settlement Agreement appointment, we request you provide verbal instructions of the circumstances leading up to the offer of a Settlement Agreement and we will review your Contract of Employment and Settlement Agreement only.
Secondly, whilst an employer will usually contribute towards the fees for a Settlement Agreement, they will not do so for a Fixed Fee Consultation.
Lincs Law Employment Solicitors Can Help You
If your employer has presented you with a Settlement Agreement or an offer letter, we would be delighted to help. Please contact us for a no obligation, free consultation. Simply use the contact form, engage in a web chat, email contactus@lincslaw.com or call us on 01522 440512 and we’ll be happy to help.
For more information about our services, please see here – https://lincslaw.co.uk/services/employees/ and https://lincslaw.co.uk/services/settlement-agreement/
Please see here for some of our recent 5 star reviews received from Settlement Agreement clients – https://lincslaw.co.uk/blog/settlement-agreement-5-star-review-from-client-with-disability-discrimination-claims/ and https://lincslaw.co.uk/blog/settlement-agreement-client-five-star-review-for-amazing-service/ and https://lincslaw.co.uk/blog/settlement-agreement-client-5-star-review-for-great-service/
Kate Key
Specialist Employment Solicitor
Lincs Law Employment Solicitors
Tags: employment settlement agreement employment solicitor Kate Key lincs law employment solicitors offer letter offered a settlement agreement settlement agreement settlement offer letter specialist employment solicitor