COMMON PITFALLS TO AVOID NEGOTIATING SETTLEMENT AGREEMENTS
Finding out your employment is coming to an end can often come as a shock and will inevitably bring up many questions. Ensuring you have a watertight settlement agreement is essential to ensure you receive the most beneficial payout at the end of your employment. A Settlement Agreement can also be used to settle any disputes that may arise in the case of employment termination.
A Settlement Agreement is a legal document drawn up between employee and employer, usually specifying a sum of money to be paid to the employee. Once this document has been signed, the employee effectively gives up their statutory employment rights and will not be able to enter into any tribunal or claim. This payment should cover any notice period or holiday pay accrued, and it's important to get all of this right. We are specialist Settlement Agreement solicitors and can guide you through this process. We have also put together our guide to help you avoid any pitfalls when negotiating a Settlement Agreement.
Don't Feel Rushed into Signing
It is recommended that employees are given at least 10 days to consider a Settlement Agreement offer, so take your time to think about what you are being presented with and don't feel any pressure to sign. Make sure you understand your options, and it's always best to get independent advice from a specialist Settlement Agreement Solicitor before signing. If you feel your employer is trying to dismiss you unfairly, you'll need to gather evidence to back this. It's important not to panic or rush, the end of your employment may feel daunting, but with the right legal advice on your side, it's possible to come out of this situation financially a lot better off.
Don't accept a Settlement Agreement You Aren't Happy With
If you don't like what you see or feel you are being unfairly treated, you probably have a strong case for negotiating a better deal. You might have a feeling that your employer is trying to gag you or pay you off un-fairly in which case, don't accept the offer and seek legal advice. A Settlement Agreement Solicitor will be able to negotiate on your behalf and help come to an arrangement that feels a lot fairer.
Take Trusted Independent Legal Advice
It's important to find a Settlement Agreement Solicitor you can trust. Firstly, you may want to ask around friends and family for recommendations. Always read the reviews on a potential solicitors website or Google Maps listing, bad reviews should ring alarm bells, and if something doesn't feel quite right, trust your gut. You need to feel this person has your best interests at heart before agreeing to work together.
Don't Be Put Off by Legal Fees
An employer will usually specify a payment towards the cost of drawing up a Settlement Agreement which includes appointing a Settlement Agreement Solicitor. If the Solicitor needs to negotiate with your employer, the Solicitor will also be negotiating a further contribution towards legal fees during this process.
If the negotiations become lengthy and complex, then the legal fees will increase, but this shouldn't put ever anyone off trying for a better deal as if you do need to contribute to the legal costs then you should find the increase in your settlement figure will more than cover this. As specialist Settlement Agreement Solicitors we can help you understand this process and guide you through it.
Check the Terms of your Settlement Agreement
Make sure the settlement agreement includes all these necessary terms and that the details are correct. A Settlement Agreement Solicitor will help you with the terminology and check the information on your behalf.
Employment End Date: The day on which the employment is terminated.
Termination Payment: The full figure to be paid.
Holidays: Any untaken holiday which is to be taken as a payment.
Tax indemnity clause: To ensure all tax liabilities are clear.
Share Awards: Details of what happens to any shares you may hold.
Bonus: Details of your eligibility for any bonuses awarded to you.
Company Property: List any company property you currently have which need to be returned. For example laptops, phones, vehicles, uniforms, office equipment or documents.
Confidentiality clause:. Any details or information which should not be discussed outside of your employment.
Reference: Your employer may provide a reference in addition to the settlement agreement. Or a statement could be included to say that a reference will be provided upon request.
Full and final settlement: The settlement agreement should state that the payment is “in full and final settlement of all and any past, present or future claims."
Post-termination restrictions: If there were post-termination restrictions in your original contract, these should be restated.
Without prejudice and subject to contract: This means the settlement agreement is not legally binding until both employer and employee have signed it.
Legal fees: The amount of money paid by the employer for legal fees should be stated.
At Settlement Agreement Services, we provide a friendly, reliable service to help you make the most of a potentially confusing time. Please get in touch with us to discuss your individual situation, and we would be happy to help.