DO I NEED A LAWYER TO NEGOTIATE A SEVERANCE
Like so many questions in life the answer is “Yes” and “No”. The question is simple but it cannot be answered without some explanation.
The first point to note is that there is nothing stopping an employer and an employee just agreeing terms by themselves for a payment be made to the employee to exit employment. Pre-1993 this was not uncommon and the employer often made the employee sign a piece of paper stating that they would not bring any claims.
The problem with this from the employer’s perspective was the provisions of s.140 of the Employment Protection (Consolidation) Act 1978 (“the EPCA”) which said that an agreement between an employee and an employer which contained provisions which prevented an employee from pursuing their legal rights under the EPCA would be void. The Government feared that employers would simply hold back legitimate and due payments e.g. notice pay or redundancy unless an employee signed away their rights. They were almost certainly correct in this assumption. The effect of this was that an employee could happily accept some money, sign a piece of paper saying they would not bring a Tribunal claim and then immediately bring a claim. The employer had the worst of two possible worlds. This was tested a few times in Tribunal and stood up to judicial scrutiny.
S. 140 EPCA left a problem because there were many situations whereby an employer and employee wanted to part company with a payment to an employee, often quite amicable but the employer was always risking the possibility of a claim and even more money being paid out.
The answer to this was the introduction of compromise agreements in the Trades Union and Labour Relations Act 1993 later inserted into the Employment Rights Act 1996 as s. 203 and this is the legislative provision which is still current today apart from the completely pointless change of name to Settlement Agreements by the coalition government in July 2013.
The original 1993 change for the first time allowed employers and employees to reach a binding agreement outside of a Tribunal or ACAS by just the employee going and getting advice from a suitably qualified, experienced and insured individual and having an appropriate certificate provided.
There are three categories of individual from whom the employee can obtain advice. A qualified lawyer, and official, employee or member of a trade Union certified in writing as being competent to give advice and authorised to do so or an advice centre worker who is also certified in writing as competent to give advice and authorised to do so.
In practice it is just easier to find a lawyer than one of the other categories of adviser. They are a bit like McDonalds – there is always one with in reasonable travelling distance and they are automatically regarded as competent under the Act and are always insured. Since by convention the employer pays the costs for the employer it is always a free service.
So the answer to the question posed in the title of this article is simple you always need a qualified adviser and a lawyer is simply the most convenient
The other really important thing to take account of is the experience of the individual adviser. Many things have changed over the last 30 years or so and one of them is the practice of law. Chances are in 1993 any dispute lawyer (or litigator ( as they were known in those days) would be able to advise on a compromise agreement or at least think they could. That is really not the case today. You need to go to an experienced employment lawyer who understands all the myriad of possible claims to maximise your negotiating position or just give you realistic advice on the strength of your position. An experienced employment lawyer should be familiar with all the issues which arise with settlement agreements and be able to advise you and negotiate the best deal on your behalf. It is a general truth that a good employment lawyer will likely be able to negotiate a better financial deal than you could achieve on your own and will also be aware of all the pitfalls and clauses which might give you a problem in the future.
A severance does not have to involve a Settlement Agreement but there are very few employers of any quality who are not familiar with the concept of a settlement agreement and will insist that their employee signs one as a condition of being paid some money even relatively small amounts on top of an employee’s contractual and statutory entitlements.
Just pick the right lawyer and it should be a relatively straightforward process. We have helped thousands of employees achieve a good settlement with their employers and assisted them to understand the process and their rights.