Falconers Law

In July 2013 the UK government renamed compromise agreements to settlement agreements.

A settlement agreement is an agreement between employer and employee if there is a dispute within the workplace regarding a dismissal. It can be an advantage to both parties as the employer can draw a line under the issue with no repercussions of any claims made in the future after the employee has left. The advantage for the employee can be that they could get substantial compensation in return for an agreement not to issue any employment related claims against your employer in the future which can be costly, time consuming and damaging to the company’s image.

• Settlement agreements are legally binding contracts. They surrender the employee’s rights to make a claim which the agreement settlement has covered to an employment tribunal or court.
• Any settlement agreement must be in writing.
• The agreements usually include some form of compensation to the employee and sometimes include a reference.
• The agreements are voluntary for both employee and employer. Both sides do not have to agree on the first offer, the case can be put into negotiation which both parties make offers and counter offers until a settlement has been agreed.
• Settlement agreements can be put forward at any stage of the employment.

As an employer you should be allowed a reasonable timeframe in which to give the suggested settlement agreement some thought and consideration. The ACAS guide indicates a 10 day period unless another timescale has been agreed with both parties.

As am employee you don’t automatically have the right to for someone to attend any meetings with you, however, as a goodwill token the employer should allow the employee to be accompanied as and when the meetings are taking place. This may help in some cases.

You may agree that after the settlement agreement has been finalised you work your notice, any details regarding the termination of the employment or payments should be listed in the settlement agreement.

If both parties cannot reach a settlement agreement and depending on the kind of the dispute, a resolution may be pursued through a performance management, disciplinary or grievance process, or mediation whichever is applicable to the circumstances of the claim. It is crucial that the employer follow a fair process and use the ACAS Code of Practice on Discipline and Grievance procedures because, if the employee is dismissed, failure to follow these guidelines may be grounds for a more substantial claim or unfair dismissal claim.

The ACAS guide can be found here

Not all settlement agreements are the same so you will need to seek legal advice and Falconers Law can help to decide whether you have a case and what you can claim. Falconers Law are here to guide you through the whole process from beginning to end.

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