Why Employers & Employees Should Use Specialist Employment Lawyers To Offer & Sign Off Settlement Agreements
Settlement Agreements are usually offered with a financial contribution from the employer so their employee can obtain independent legal advice. This is good news for employees because this enables them to make informed choices about whether they should sign away their rights in exchange for compensation, a good reference and other agreed benefits.
Some law firms advertise that their services are free to employees who have been offered Settlement Agreements because the employer pays all of their legal fees. This is the cases when the issues are straightforward, usually where the compensation offered is fair and the reason why the employer is offering a Settlement Agreement has been clearly set out and a fair procedure followed. This is more likely to occur where the employer is instructing employment law experts to advise on the appropriate level of compensation and they are following the Acas Code of Practice on Settlement Agreements.
However, some of the Settlement Agreements that we take on do not provide adequate compensation for the employee in exchange for waiving their rights to bring claims in the Employment Tribunal or County Court. This means we need to help an employee raise a formal grievance or appeal the outcome of an unfair disciplinary or capability hearing to ensure that our counter offer for a higher amount of compensation will succeed. Legal costs can rise to considerably more than the employers’ financial contribution and although the employee has to fund part of their legal fees, this is in exchange for increasing their compensation by thousands of pounds. In most cases we will also obtain increased benefits and preferential taxation terms so that their compensation is maximised.
In some cases, employers may cover increased legal costs. But even in cases where they have had to provide higher compensation because they have treated an employee unfairly, they take the view that their employee should fund excess legal fees out of their increased compensation. Not surprisingly we find that employees are more than happy to fund the difference between their employer’s contribution and the excess because they are ‘quid’s in’.
From an employers’ perspective, providing a Settlement Agreement with a list of three different law firms who all specialise in employment law helps to ensure that generalist solicitors are not approached who may provide misleading advice. This can result in fair settlement offers being rejected and unreasonable counter offers being put forward as the lawyer may be over optimistic about the employee’s chances of succeeding in an Employment Tribunal.
While it is important that employees have freedom of choice so that they are able to seek independent legal advice from an adviser of their choice, it is in both parties’ interest that the chosen adviser is an expert in employment law.
Good employment relations ultimately rely on working with professionals with the relevant expertise who provide fair and accurate legal advice to both employers and employees. This ensures disputes and potential claims are settled efficiently and economically.