Settlement Agreement Specialists

Given our extensive experience advising employees on settlement agreements, we will go through the terms of the agreement and see whether any amendments are necessary. 

We will also review the terms of offer and advise you if there is scope for further negotiation. We can advise you on the wording of your agreement and negotiate clauses that protect you. 

Your employer will specify what their legal contribution towards your fees is within the settlement agreement. It will usually be £350 to £750 plus VAT. We cap our fees at whatever your employer’s contribution is to advise and sign off on the agreement. The fee would also include our proposed changes to the agreement during the initial appointment.

If you wish us to negotiate the terms of offer, then the employer’s contribution may not be sufficient. We will advise you of any costs that may go over your employer’s contribution before you incur any additional fees so you can make an informed decision on whether you wish to negotiate a better deal or you wish to accept the terms as they are.

We can usually schedule an initial call/video meeting on the same day. Our appointments can be booked Monday to Friday 8:00am to 8:00pm. If you are happy with what has been proposed and decide to sign the agreement as is, we can sign off on the agreement and send this to your employer on the same day.

If you are not happy with the wording, we would make the proposed changes and send an email to your employer directly. The time frames will depend on how quickly your employer responds, but from our experience the whole process usually can be completed within 1 to 3 working days. 

If you are not happy with the terms, including the employer’s offer and wish for us to negotiate a better deal, it may take between 1 – 10 days, again depending on how quickly your employer responds to our new proposals.

You don’t have to sign the agreement. The key issue to consider is what are your other options.

Settlement agreement will almost always be more beneficial to an employee than litigation. Litigation is expensive and uncertain and so if you are hesitant in signing the agreement on the current terms, it may be best to approach your employer to make a counter offer. 

When advising you we will discuss the circumstances leading up to this point and we can advise you on whether we believe there is scope for you to negotiate more. If there is, we can support you to approach your employer yourself, or can approach your employer on your behalf. 

A Settlement Agreement can be an excellent way to resolve a dispute without litigation. 

Legal Fees
If you decide to 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%). Settling a matter quickly, means that you can walk away with most of your compensation.

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. 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 under which you have been presented with the settlement agreement. 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 other.

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 or commission  if your employment is subject to notice, or it has terminated. As such bonus/commission 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 employment 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. This payment is normally subject to usual tax and national insurance deductions.