If you have been offered a Settlement Agreement by your employer, you have some serious decisions to make. Read on for more information.
I have helped numerous clients with their Settlement Agreements (previously known as a Compromise Agreements) over the years. Every client has a different reaction or goes through a different process when they have been offered a Settlement Agreement. The first question is usually, “what is a Settlement Agreement?”. The second question is “Do I have to sign?”. I try to answer those questions in this post.
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.
Settlement Agreements are offered by employers for many different reasons, and accepted by employees for many reasons more. Sometimes you will be offered a Settlement Agreement as a result of a dispute, sometimes it is an amicable parting of the ways. Whatever the reason, you need to make sure you are making the right decision for you. To do this, you need your solicitor to fully explain and discuss the Settlement Agreement with you. Whatever the reasons for the Settlement Agreement, there are some points to remember:-
- Whether you sign a Settlement Agreement is your choice. Obviously, every client’s circumstances are unique, but a game of “what if you don’t sign?” usually helps to clarify your options. I have had clients who thought they had to sign the Settlement Agreement, but when we talked through the background together their situation was not as they thought. You can only make an informed decision if you know all your options.
- Make sure you are actually getting some compensation for giving up your job and all your employment rights. When discussing the compensation payment, the first part of the process is to identify what payments you would be entitled to in any event. I look at notice, holiday, bonuses, long service awards, car allowance, pension contributions, redundancy payments etc. To be blunt, there is no need for you to sign a Settlement Agreement and subject yourself to all sorts of waivers and obligations, if you are simply receiving the payments you are already entitled to.
- Make sure you understand what your obligations are under the Settlement Agreement. All sorts of additional requirements and indemnities sneak in to these types of contracts. Again, whether you sign the Settlement Agreement is your decision.
I fully appreciate that signing a Settlement Agreement will always be a personal decision for my clients. However, anyone considering a Settlement Agreement should ensure they have as much information as possible to help them make that decision. After all, playing “what if?” after you sign is simply too late.
Can Lincs Law Employment Solicitors Help You?
If you have been offered a Settlement Agreement and are looking for the right solicitor to help you, give us a call on 01522 440512 for a free, no obligation consultation or visit our website at https://www.lincslaw.co.uk/services/settlement-agreements
Specialist Employment Law Solicitor
Lincs Law Employment Solicitors, Lincoln