Exits & Negotiations

We can approach your employer on your behalf and propose the terms for the termination of your employment. We can also support you in the background, if you prefer to have the conversation with your employer yourself. 

Often times, with our support, employees wish to approach their employer first and only if they have no response, or if the employer is not taking them seriously, that we are then instructed to approach the employer directly to propose settlement terms.

For the settlement agreement to be valid, you will need to be advised on the terms and effects of the settlement agreement.

It is therefore usual to request that your employer contributes towards your legal fees. This will be anywhere between £350 to £1,000 plus VAT. In some instances it may be more, but it will be rare.

If you wish us to negotiate the terms of offer, then the employer’s contribution may not be sufficient. To negotiate an exit from your employer will depend on how co-operative your employer is and the fees may range between £750 – £1,500. Your employer’s contribution would be deducted from the final fees.

It is important to remember that the higher end of the fees is where your employer agrees to settle. This is because if we approach your employer, and your employer is unwilling to settle there would be no point for you to continue instructing us to negotiate an exit. Instead you may choose to instruct us to issue a claim against your employer which would usually be covered under a no win no fee arrangement. 

We can usually schedule an initial call/video meeting on the same day.

The time frames in respect of negotiation will depend on how quickly your employer responds, but from our experience the whole process usually can be completed within 2 weeks or so.

A negotiated exit can be an excellent way to resolve a dispute with your employer and move on to new endeavours without suffering a loss.

If you decide to resign from your employment and then claim compensation, it is usually more difficult to negotiate a settlement. This is because you are no longer an employee, and the risk for the employer to ‘get it wrong’ is reduced. Your employer may also prefer to wait and see if you are serious and if you are going to issue a claim.

Legal Fees
Litigate, your legal fees can accumulate very quickly. Even if you are represented on a no win no fee basis, you will have to pay your representative, usually a significant proportion of your winnings (up to 35%).

Reference
Your employer has no legal obligation to provide you with a reference. As such, even if you win your case, your employer will not be obliged to issue you with one. It is therefore usual to agree on the wording of the reference with your employer as part of the term of your settlement agreement. This would oblige your employer to issue a reference with agreed wording when it is requested by your new prospective employer which will make it easier for you to find another employment. You can also include a term that means your employer cannot make bad comments about you that may damage your reputation or your chances of success in obtaining new employment. 

Public Judgments
Employment tribunal judgments are public. Therefore when you issue a claim, even if you withdraw it later, there will be a public record of you suing your employer.

Litigation Risk
There is always a litigation risk. Sometimes even the best cases stumble during the hearing. There may be lack of evidence or an uncertain legal point that means that after all the time, costs and effort, no one can guarantee a successful outcome of your case if it proceeds all the way to litigation. 

Time
The Tribunals are currently overwhelmed with cases which means that it may take years for you to get your compensation, even if you win your case.

Loss 
A lot of the times you will only be entitled to claim for the loss you have suffered. Which means you have to actually suffer the loss in order to claim it (unless you are also bringing a discrimination or a claim where there is a detriment suffered). If you agree a settlement before you have even suffered a loss, if you find a new job immediately after, this will be irrelevant and you will get to keep all the compensation despite the fact that you have never suffered a loss. As such settlement agreements are usually the best option commercially.

Tax
Compensation payments for the loss of employment or injury to feelings can be paid tax free up to £30,000 

A lot will depend on the circumstances. The following financial payments would generally be included

Benefits
All your contractual benefits up until the termination of employment. This would include your salary, may include a bonus and commission and other benefits such as health care insurance, death in service benefit, gym membership and others;

Pilon
Payment in lieu of your notice. You can usually choose to be paid in lieu of your notice (which means your employment would terminate immediately) or you can request that your employment terminates in the future, but that you remain on garden leave until such time. We can discuss the pros and cons of either during our appointment, however this payment is normally non negotiable, unless you are subject to gross misconduct proceedings that are well evidenced;

Holiday Pay
If you have accrued any holiday that you did not get a chance to take before the termination of your employment, these should be paid to you in lieu. If you have taken over your allowance, you would usually expect to negotiate that your employer will not be deducting these from your final payment. 

Ex Gratia Payment
This payment is normally made in consideration of you entering into this agreement and assuring the employer that you will not bring a claim against them. Ex – gratia payment is to intended to compensate you for the loss of your employment and for any breaches of your statutory rights that you have suffered. Up to £30,000 of this payment is usually tax free;

Redundancy Payment 
If you are being made redundant you should also receive your redundancy payment. It may be that your redundancy payment will be included within the ex gratia payment;

Bonus
It is quite usual for the employment contract to contain a clause that deprives you of any bonus if your employment is subject to notice, or it has terminated. As such bonus may form a significant consideration for you when deciding whether to accept a settlement agreement. 

Shares
Arrangements in respect of long term incentive plans and shares must be discussed and considered before you enter into a settlement agreement. This is because you may be subject to ‘bad leaver’ or ‘good leaver’ provisions within any share/incentive plan scheme. If you are expected to release those options, you would usually expect to be paid for those under the terms of the settlement agreement. 

Confidentiality Consideration
Your employer may also wish to pay you a small sum as consideration for you to agree to keep the terms of the agreement confidential and not to make any derogatory comments about your employer or any of their officers, employees and any other stakeholders.