If you have been offered a Settlement Agreement by your employer, you might be feeling overwhelmed and anxious about the next steps. This blog sets out our 5 top tips to help make the Settlement Agreement process a little easier to navigate and ensure the best outcome for you.
What is a Settlement Agreement?
A Settlement Agreement is a legally binding contract between you and your employer. The Agreement must be in writing, you must enter it voluntarily, and you must take independent legal advice before signing it.
A Settlement Agreement will (usually) do the following things:
- Bring your employment to an end.
- Set out any benefits (cash or otherwise) that you will receive.
- Prevent you pursuing employment law claims against your employer.
- Include restrictions on your future activities (confidentiality and competition).
Our Top 5 Tips
- Don’t rush. The first and most important tip is to make sure you don’t rush into a decision that is not right for you. The ACAS Code of Practice on Settlement Agreements, states at paragraph 12 “As a general rule, a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise”. Taking time to review the circumstances surrounding the offer of a settlement agreement, and ensuring the package is fair and right for you, is critical.
- Make sure the agreement includes all the sums you are owed. This might sound obvious but is often overlooked. As a minimum, this should include considering issues should as a) wages to the termination date, b) accrued but untaken annual leave, c) accrued but unpaid overtime, d) outstanding expenses, e) entitlement to any bonus or share pay-outs, f) contractual notice entitlement, and g) a compensatory payment commensurate to the circumstances of your departure.
- Make sure you can agree to the waiver of claims suggested. You are likely to be asked to waive all employment law claims and, in most cases, that may pose no issues at all. However, if you have any existing personal injury claims, or knowledge of an accident at work that you wish to pursue as a claim, this will need referencing as an exclusion in your agreement.
- Consider future covenants and restrictions. You may already have restrictive covenants and confidentiality restrictions in your employment contract. However, your employer may seek to tighten those up, or even extend them as part of this process. Ensure you understand any obligations that might hinder your attempts to continue in your chosen field and consider seeking amendments if the provisions are too onerous for you to manage.
- Consider practicalities. The devil is in the detail and far too often we see agreements that fall short in terms of simple practicalities. This can include issues such as when and how company property will be returned, if there will be an agreed announcement, if there will be an agreed reference and if so, a copy being attached to the final agreement. It is also important to ensure that appropriate timescales for all the above (and benefit payments) are included.
A Recent Case & Our Expertise
I recently assisted a client with their settlement agreement and was delighted to receive the following 5-star review.
“Sophie was so kind, clear, and professional when it came to helping me with my settlement agreement. I felt like I was in such good hands through the whole process. I wholeheartedly recommend, and would not hesitate to use Sophie again, should I need to in future”.
Let Lincs Law Employment Solicitors Help You
If you have been offered a Settlement Agreement, or are in discussions likely to lead to a Settlement Agreement, call us on 01522 440512 for a free consultation. Alternatively, for more information about Lincs Law Employment Solicitors, visit our website at www.lincslaw.co.uk
Sophie Goodwill, Specialist Employment Law Solicitor
Lincs Law Employment Solicitors