How to negotiate of an effective settlement agreement.

Settlement agreements were brought in the year 2013 as an option for employers to expedite employees out of their organization without the risk of legal act from the employee. They are generally used in situations of redundancy or where an employee is underachieving and involve offering the employee a financial disbursement in exchange for leaving the company and agreeing not to take legal action.

For employers, settlement agreements can make it easier to feasible workers who are no longer worthy; while for employees they provide a way to get a financial settlement truthful, without the requirement to go to an employment tribunal. This is typically faster, less expensive and less stressful for both parties.

To be legally binding, a settlement agreement must meet the following 3 conditions:

·         It needs to be written.

·         It should be associated to a specific claim or claims the employee could bring against the employer.

·         The employee needs to have obtained legal advice before signing to verify they fully understand the agreement.

Being an employer, the priority in negotiating a settlement agreement should be:

·         Getting the employee to agree to the settlement without a fight.

·         Not paying more than you need to.

·         That all possible types of claim they could bring are considered.

·         That the employee will not take any action that harms your business interests e.g. attempting to take clients with them when they leave.

As an employee, your priorities in negotiating a settlement agreement should be:

·         The financial settlement is fair.

·         Your employer agrees to provide a good reference.

·         If a reason is given in the agreement for your termination, that this will not conflict with the employer being able to give you a good reference.

During negotiations, it is worth keeping in mind:

·         Your legal rights and how much you would be likely to receive as a settlement if you took your case to an employment tribunal.

·         Employment tribunal procedures generally take at least 6 months, so even if the settlement agreement offered is not as generous as you might like, it may be worth accepting rather than spending months waiting for a resolution.

·         The first £30,000 of any termination payment will normally be tax-free.

·         If you are placed on “garden leave” (i.e. still technically employed and paid your salary, but not required to attend work) you will be subject to the terms of your employment contract until your employment officially ends.

Whether you are an employer looking to use a settlement agreement to remove a member of your team, or an employee who has been offered a settlement agreement, getting the right legal advice and representation is essential.

An expert employment law attorney will be able to ensure your interests are protected and that all likely eventualities are considered, giving you peace of mind that the matter will be truly resolved once the settlement agreement is signed.

These highly experienced Settlement agreement lawyers in London can help you with all aspects of employment law, including negotiating settlement agreements, whether as an employer or employee.