When you and your employer have agreed to part on terms this may be formally recorded Settlement Agreement (previously known as Compromise Agreements). Once correctly executed a Settlement Agreement will bring your employment to an end on a certain date (the Termination Date). Typically, employees are offered a sum of money in return for signing a Settlement Agreement and many employees are offered an agreed reference by their employer. In return, the Employer is offered the reassurance that the outgoing employee will not bring a claim against them in the Employment Tribunal.
At Summerfield Browne Solicitors we have seen an increase in the use of Settlement Agreements where employers wish to bring an employee’s employment to an end by reason of redundancy without having followed the formal redundancy process.
The requirements for a binding Settlement Agreement are as follows:
1. The Agreement must be in writing;
2. The Employee must have received advice from a relevant independent adviser on the terms of the Settlement Agreement; and
3. The Adviser must have a contract of insurance or indemnity covering the risk of a claim.
We have advised many of our clients on the settlement terms that they have been offered and what they would be entitled to claim for if they did not sign the Settlement Agreement and instead pursued their employer in the employment tribunal.
The good news is that your employer will usually pay for your legal costs in seeking advice on the terms of the Settlement Agreement. The typical cost quoted within Settlement Agreements is between £250.00 plus VAT - £500.00 plus VAT.
We offer a telephone-based service for our clients where we can advise our clients on the terms of the Settlement Agreement with the ability to execute the document remotely (some Settlement Agreements indicate at the end of the Agreement that the document can be executed in ‘counterpart’) In other words, a face-to-face meeting with an Employment Law Solicitor is not strictly necessary and it may be possible to obtain the advice over the telephone.
We know that some employees are offered a Settlement Agreement and need the advice quickly. We can often take instructions from a client, provide advice on the Settlement Agreement and have the document back with your employer within 2 – 3 days.
Summerfield Browne have offices in London, Birmingham, Oxford, Cambridge and Leicester.
