Settlement Agreement Advice For Employers

Martin Searle Solicitors is one of the UK’s leading employment Settlement Agreement solicitors for employers. We have a great deal of experience in providing legal guidance for employers on offering Settlement Agreements to their employees. We ensure that a Settlement Agreement between an employer and employee treats your employee fairly while protecting your business from future liability.

What is a Settlement Agreement?

A Settlement Agreement between an employer and an employee is a legally binding agreement, usually offered shortly before or after termination of employment. They used to be known as a Compromise Agreement and may sometimes be referred to as a Termination Agreement.

Benefits of Employers Using a Settlement Agreement

• Employment Settlement Agreements allow for a clean break in the employment relationship, where your employee agrees to waive their right to bring claims in return for an agreed sum of compensation
• They can also be a speedy, efficient and pragmatic way of terminating the employment relationship between you and your employee
• A properly worded Settlement Agreement, drafted by an expert Employment lawyer, will mean that you have complete peace of mind, as your former employee will not be able to bring any claims against your company

Risks of Employers Using a Settlement Agreement

• If an employment Settlement Agreement is introduced, particularly in relation to a workplace discrimination claim, the contents of the Settlement Agreement and the way it is given to your employee may become admissible evidence as part of any Employment Tribunal proceedings. Protected characteristics, which may result in a discrimination claim, are wide-ranging since age was added in 2006, as this applies to both the younger and the older employee, this could cover everyone.
• If you circumvent a fair process, such as a capability, disciplinary or redundancy procedure, without offering sufficient compensation for this, your employee may refuse to sign and may have strong grounds for negotiating a higher settlement or instigating formal workplace procedures, such as a grievance, to bring a claim in the Tribunal
• The relationship of trust and confidence between you and your employee may be destroyed if the way in which the Settlement Agreement is offered is badly managed. In some cases, this may affect the morale of your entire workforce

Best Practice Advice

Before offering an employee or a number of employees Settlement Agreements and compensation, you should identify where the risk of any future claim may lie and assess your potential financial liability.

It may also be wise to use a Settlement Agreement when an ex-gratia payment is being made, as in the case of redundancy. This is to ensure that no further claims for compensation can be made against you and/or your company.

In certain situations, it may be necessary to commence “best practice” procedures, such as a formal capability, disciplinary, or redundancy process, to resolve the matter with minimal financial risk to the company. We often find that employees request a Settlement Agreement as an alternative to a more formal, drawn-out process.

Recently, there has been concern about Non-Disclosure Agreements (NDA’s) being used to try and silence whistleblowers and women making allegations of sexual assault. Any confidentiality clause that seeks to prevent an individual from speaking to the police or a regulator will not be legally binding.

How we help protect employers’ businesses

We offer comprehensive employer guidance for Settlement Agreements from expert Employment lawyers to ensure your business is protected. All of our solicitors have vast experience in all aspects of employment law related to settlement agreements.

In the first instance, we will thoroughly explore the background issues behind the Settlement Agreement. We will consider at what point it is appropriate for you to offer a Settlement Agreement, particularly where there may be a possible discrimination claim.

We will work with you to ensure there is no unintentional discrimination in any aspect of your process. We also review any outstanding contractual, redundancy, disciplinary, capability and grievance matters before advising on a suitable settlement sum.

We will also ensure that, in situations where your employee whistle blows and alleges fraud or makes allegations that could be prosecuted in criminal court, such as sexual assault, you take a Best Practice approach by supporting them in their decision to take further action. This will ensure that you do not inadvertently breach any regulatory codes of conduct.

Once these areas have been addressed, we will assist you in drafting a Settlement Agreement.

What are the Settlement Agreement legal costs?

If you are considering offering a Settlement Agreement to an employee, please contact us. We are more than happy to have a free initial chat with you to point you in the right direction. Our advice will mean you are ready to make an informed decision about how you wish to proceed.

Our fees for a well-drafted Settlement Agreement are usually between £500 and £1,500 (plus VAT), depending on the complexity and breadth of the issues.

For example, whether you are reiterating existing post-termination restrictions or even introducing new ones to protect your business. In addition, you will normally be expected to contribute to your employee’s legal fees, usually between £500 and £750 (plus VAT).

Where possible, we will offer you a fixed fee for a tailor-made Settlement Agreement advice package that includes drafting the document and negotiating with the employee’s legal representative.

We also offer a multiple redundancy Settlement Agreement sign-off service for employers and trade unions. This service is a professional and efficient way to sign multiple Settlement Agreements.

Contact us today on 01273 609911 or email info@ms-solicitors.co.uk.