Settlement Agreement
Over the last 12 years I have noticed a trend that starts around this time of year and lasts right up until Christmas Eve.
The trend is a significant increase in clients coming to see me with Settlement Agreements from their employers.
Receiving a Settlement Agreement just before Christmas is not in most cases the ideal gift. Losing your job at this time can cause financial uncertainty and anxiety. However, with the right legal advice on your side, it is still possible to have a Merry Christmas.
What is a Settlement Agreement?
A Settlement Agreement is a legal contract between an employer and an employee. There are lots of reasons why Settlement Agreements are offered to employees. They could be offered as a means of providing an enhanced redundancy payment, to resolve a grievance or misconduct dispute or even at the request of the employee. Unlike other times of the year, I have seen Settlement Agreements offered just before Christmas, simply because employers want to start the New Year without a particular employee. This clearly gives employees a strong negotiating position.
Whatever the reason for the Agreement, the important thing to remember is that once it is signed off by the employee and their independent legal advisor, the employee will be prohibited from pursuing various claims against the employer.
Important Settlement Agreement Considerations?
Compensation
As I say above, once an employee has signed a Settlement Agreement they will be prohibited from pursuing employment law claims against their employer. For this reason, it is hugely important that an appropriate and fair amount of compensation is being paid. I always assess what potential claims the employee has, what compensation an Employment Tribunal would be likely to award for those claims, and give advice on what a reasonable level of compensation to accept would be.
The waiver of claims
The waiver of claims is the list of claims the employee gives up once the Agreement is concluded and the employee needs to be aware of how wide ranging this is. Usually there are no issues. However, and by way of example, if the employee has an existing personal injury claim they want to pursue, it is important the Agreement takes that into account.
Future restrictions
Employers tend to want to include various restrictions in Settlement Agreements, such as that the employee will not work for a competitor or has not already obtained new work. These restrictions may well be fair but it is always important to check the facts and limitations with clients to ensure they can abide by them.
Lincs Law Employment Solicitors Can Help
If you have been offered a Settlement Agreement or have any employment law problems, I can help. Please call me on 01522 440512 or email ContactUs@lincslaw.com For more information about Settlement Agreements, visit our website at https://lincslaw.co.uk/services/settlement-agreement/
Sophie Goodwill
Specialist Employment Solicitor
Lincs Law Employment Solicitors
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