At Parker Rhodes Hickmotts we can help guide you through your Settlement Agreement, assist you with negotiating the terms and provide you with advice tailored to your specific circumstances.
What is a Settlement Agreement?
A Settlement Agreement is a legally binding contract, in writing, where the Employee waives the right to make the claims detailed in the agreement to an employment tribunal or court.
When would I get offered a Settlement Agreement?
Whilst a Settlement Agreement can be offered to an Employee at any time they are most usually used by Employers when they are terminating an Employee’s contract of employment.
They may, for example, be used as a means of agreeing the terms of terminating an Employees contract mutually and without following full disciplinary or redundancy procedure.
Why does my employer want me to sign a Settlement Agreement?
A Settlement Agreement provides both the Employer and Employee with certainty and removes the risk of lengthy and costly litigation before an employment tribunal or court.
As the Employee agrees to waive the right to make certain claims against the Employer to an employment tribunal or court the Employee’s employment can be terminated without following usual disciplinary or redundancy procedures.
What is the benefit to me of a Settlement Agreement?
In the majority of cases an Employee will be offered compensation to sign the Settlement Agreement which exceeds the payment they would ordinarily receive either contractually or by way of statutory entitlement on the termination of their Employment.
What if I do not sign the Settlement Agreement?
If negotiations on the terms of the Settlement Agreement break down, or if you choose not to sign the Settlement Agreement then you can still seek to enforce your contract of employment.
It may be that the compensation payment offered in the Settlement Agreement does not adequately compensate you for any claim which you have and you may want to pursue a claim. You should be mindful of the applicable time limits for pursuing a claim, and also the cost of doing so.
Any discussions relating to a Settlement Agreement can not usually be used as evidence in any claim.
Why do I need legal advice?
In order for the Settlement Agreement to be legally binding strict rules require to be met. These include that the Employee receives independent advice. The advisor must be insured to cover the risk of a potential claim by the Employee arising from the advice.
It is important that you are fully advised as to your options, including whether signing the Agreement is in your best interests.
How long does it take?
Most Employers want Settlement Agreements to be signed quickly. You should however be given reasonable time to consider the terms of the document and to obtain independent advice. In practice most straightforward agreements will be amended (if necessary) and signed within a period of a week to ten days.
How much does it cost?
As a Settlement Agreement is not binding unless you have received Legal Advice your Employer will usually contribute between £250 and £500 plus VAT towards your legal expenses. Where your proposed Settlement Agreement is relatively straightforward we are usually able to restrict our fee to the contribution paid by your employer.
Where additional work is required and your Employer’s contribution does not cover this you will be charged at the rate of £200 or £175 per hour plus, depending on the Solicitor instructed. It is unlikely that the additional work instructed will exceed one and a half hours, and we will keep you fully informed prior to the work commencing.
Whilst some solicitors are of the opinion that your employer may not contribute towards your legal advice if you do not sign the Agreement, our approach, which we have successfully argued on a number of occasions, is that your Employer is obliged to pay for the legal advice as they have entered into an oral contract with you when they tell you that they will pay for your legal advice. We will therefore do everything we can to ensure that your fee is paid by your Employer, even when you choose not to sign the Agreement.
We offer Independent Legal Advice in relation to property transactions and where possible we offer a fixed fee for this service of;
Meeting, review documents, certify and letter of advice - £400 plus vat (£80).
For any additional person - £150 plus vat (£30).
