What if your employer offers you a settlement agreement?

If your employer gives you a settlement agreement, thinking whether to accept can be intimidating. Here are some key points to keep in mind.

If your employer offers you a settlement agreement, deciding whether you should accept it can be quite complexing.

Settlement agreements are usually given to employees when they are being made jobless. The documents sketch the terms of the deal: generally, an employee is provided money in return for specific conditions, such as not highlighting a claim against their employer. It’s a final warning before your employment is terminated.

Settlement agreements are also given to employees if an employer thinks they are not performing good in their job or are remorseful of misconduct. In some scenarios, an employee will be aware that their boss is hopeless, while for others, being offered a settlement agreement can come as a tremor.

When you accept a settlement agreement, your employment is ended. You’ll generally receive a sum of money in return for losing your job and few employment rights.

If you refuse to accept, however, you may well face a disciplinary procedure or a redundancy situation.

What is a settlement agreement?

Settlement agreements brought into action on 29 July, as part of government policies to amend the employment laws.

They’re legally binding agreements that lay out the full terms of a settlement between an employer and an employee. Each settlement agreement will differ but typically the documents include clauses that deal with: the claims to be settled; the payments you will receive and the relevant tax issues; a confidentially/gagging clause (so you can’t bad mouth your employer) and any agreed reference from your employer.

The latest scene

While settlement agreements are basically a repackaging of cooperation agreements, the new thing is that when you’re offered one, your employer is likely to have a pre-termination negotiation with you too.

Pre-termination negotiations – also called as a protected conversations – have come into action as a way of compelling employers to have frank conversations with employees about terminating their services. Anything that’s said in this discussion is protected and cannot be used by either party against the other in an unfair dismissal claim.

The catch is that there are exceptions: the conversation is not protected by the new laws, in discrimination cases, whistle blowing or other automatically unfair dismissal claims. This means that the negotiations no longer have to remain off-the-record if either party behaves badly during the process. So, in these cases, what was said during the protected conversation could come out into the open.

This is where settlement agreement lawyers can help you in dealing with the situation.

These settlement agreement lawyers London can help you take into account whether you’re getting a great deal and whether you have any basis for a claim against your employer – such as discernment or unfair dismissal. To decide whether an agreement is a fair deal, you need to consider why you’re being offered the agreement and what privileges you are being asked to waive as an outcome of you accepting the offer.