In What Situations Might A Settlement Agreement Be Offered?
Settlement Agreements are often used to deal with concerns over performance and concerns over conduct.
Where there are performance concerns, we would expect to see that the employee has been or is about to be placed on a Performance Review. This would set out agreed objectives and targets to be reached within a reasonable timescale. The compensation offered should be based on the amount of time it would take to go through a fair Performance Review, usually 3 – 6 months.
As dismissal would always be on notice, except in rare cases where there had been gross negligence, notice should be paid in lieu on top of any compensation.
Where there are allegations of misconduct, not only would we expect to see a fair process, we would also check that the threatened penalty was within a range of reasonable responses from a reasonable employer. If a mere written warning was the likely outcome, we would look to substantially increase the compensation offered in exchange for our client agreeing to terminate their contract.
The most common reason for Settlement Agreements being offered is where employers are making employees redundant. In some cases, an enhanced sum is offered in exchange for the employer not having to undertake a fair process. This makes it difficult to assess whether the redundancy is fair, as the employee will not have been fully informed and consulted with so that they know why they are going to be made redundant and where their work is going to.
We make sure that redundancy is the real reason for dismissal, and that the compensation covers the time that it would have taken to properly inform and consult. We also check that the payments are correct and all contractual and statutory rights have been met.
We always offer an initial free telephone call to discuss the background of your case. It is extremely important that a specialist Employment Law solicitor advises on the basis of what you would get were your case to progress to an Employment Tribunal. Where necessary, we will negotiate more money on your behalf.
For general advice about Settlement Agreements for employees please refer to our factsheet here.
If your employer offers you a Settlement Agreement, this will need to be signed off by an independent solicitor. Please contact our Employment Law team on 01273 609911, or email firstname.lastname@example.org so we can ensure that your compensation is maximised and the payments are made so that they are tax efficient.