If your employer has provided you with a settlement agreement (formerly known as compromise agreements) you will need independent legal advice.
Our specialist employment team has considerable experience of providing confidential independent legal advice to employees whether you are a manager at an SME, a city worker, or an executive at a FTSE 250 company.
We offer a quick and efficient settlement agreement advice service.
Quick guide to settlement agreements (formerly known as compromise agreements)
What is a settlement agreement?
A settlement agreement is a contract, regulated by statute, between an employer and an employee (or ex-employee) to settle a claim or a potential claims and/or to prevent the employee from instituting or continuing with employment proceedings in the employment tribunal (and other jurisdictions, such as the civil courts).
Why have I been asked to sign a settlement agreement?
It is increasingly common for employers to want all employees – regardless of seniority – to enter into a settlement agreement. Your employer will offer a financial sum to you in return for an effective waiver of all claims (these are often listed in a separate annex) against your employer (and often group companies and named individuals) arising out of your employment and its termination.
Settlement agreements are commonly provided to employees where the employer wishes to avoid the publicity and costs of litigation attached to terminating an individual’s employment.
Why do I need independent legal advice?
For a settlement agreement to be valid and legally binding, it must meet the following criteria:
- it must be in writing;
- it must relate to a particular complaint or particular proceedings; and
- the employee must have received legal advice from a relevant independent adviser on the terms and effect of the proposed agreement; and its effect on the employee’s ability to pursue any rights before at an employment tribunal.
What does an independent legal adviser do?
As your independent legal adviser, our employment team will advise on the terms and effect of the settlement agreement, and in particular, its effect on your ability to bring a claim in the employment tribunal under the relevant legislation.
We can help you to negotiate the terms of your settlement agreement.
If instructed to do so, we can also help you to negotiate the terms of the settlement agreement drawing on over 12 years of experience.
What if we cannot agree terms of the settlement agreement?
If there is a dispute and the parties are not able to resolve the matter amicably, then we can advise you as to the merits and likely quantum of a claim.
How much does it cost to take advice on a settlement agreement?
Most employers will make a contribution towards your legal costs for taking advice on the settlement agreement.
Our client care letter will set out details of our charge rates, and the likely costs of the initial stages. We will advise you on the likely costs, and where appropriate in any negotiations, ask your employer to increase any contribution.
What can employees do to make the process quicker?
To make the process quicker, it would be helpful if you could put together a bundle of the following documents:
- The settlement agreement (in a Word file format if possible).
- Copies of any relevant correspondence (including emails) that you have received from your employer about the settlement agreement.
- Your contract of employment.
- Relevant company policies or procedures – these are often included in a staff handbook.
- Details of any benefits/share schemes.
Your employment history
We also need to know some details about your employment history including:
- Your start date and the reasons for any breaks in the contract (to calculate statutory period of continuous employment).
- Your date of birth (so as to calculate any statutory entitlements).
- Details of disciplinary records and/or performance appraisals.
- Details of any grievances, formal or informal, (if applicable).
- Your home address.
Administrative steps for new clients
We set out below a list of the initial administrative steps that we need to carry out for all new clients:
- Conflict check: We need to carry out a conflict check to ensure that there would not be a conflict of interest in representing you.
- Client care letter: We need to send you a client care letter, and our terms and conditions of business. This will set out details of our charge rates, and the likely costs of the initial stages. You will need to sign this and return it to us, along with any requested monies on account.
- ID Check: We will need to take copies of your passport or a photo driving licence, and also a recent utility bill or a bank statement sent to your home address.
“At a time when it was important to have someone in my corner, Phillip was really great at working through the issues and coming up with practical solutions. His knowledge of Employment law was first-rate and I found his judgment and negotiation skills to both be of the highest order”. Former director of FTSE 100 company.
We look forward to working with you
Philip Henson, Partner and Head of Employment Law