Settlement Agreement Negotiations

Many of us Brits’ fear negotiating, with 30% of us admitting to not negotiating at all and a further 25% finding negotiating embarrassing, scary or intimidating.

However, the fear of negotiating comes at a huge cost, with many employees missing out on thousands of pounds in extra compensation.

Negotiating Your Settlement Agreement 

This is why instructing experienced negotiators such as those contained within Attwells’ Employment Law Team is absolutely key in ensuring you maximise the compensation you receive from your employer under a settlement agreement.

Instructing an employment lawyer gives you a much greater chance of getting a better payout and shows your employer you mean business.

A settlement agreement is a legally binding contract between an employee and employer, under which an employee receives a cash sum in return for signing away their rights to bring an Employment Tribunal Claim.

Settlement Agreement Redundancy

Settlement Agreement are used for redundancy, working disputes or when settling potential or actual Employment Tribunal Claims.

We offer clients an online Settlement Agreement review service. You need only answer a handful of simple questions and one of our Employment Law Team will review your Settlement Agreement completely FREE of charge.  

What is a Settlement Agreement?

Settlement Agreements (formerly called compromise agreements) are legally binding agreements that set out the full terms of an agreement between an employer and employee, whereby an employee agrees to sign away their rights to bring a claim against their employer in return for a cash sum.

Settlement Agreements are generally offered to employees when a dispute in the workplace arises, a redundancy process is being undertaken or when employee misconduct is alleged.

They can also be used when settling potential or actual Employment Tribunal Claims.

Our Employment Law Team have many years’ experience of successfully negotiating settlement agreements for our clients, with our client’s regularly receiving increases in compensation 10 times that paid out in legal fees.

How Much Could I Receive By Negotiating my Settlement Agreement?

Examples of our previous work include:

  • Obtaining a settlement in excess of £100,000 for an employee client, after just one letter to their employer. In this case, our client, a senior executive, was dismissed unfairly by a multinational bank for gross misconduct. We drafted his appeal letter, alongside a further negotiation letter, resulting in his dismissal being overturned and him receiving a settlement package in excess of £100,000.
     
  • Agreeing settlement in the region of £350,000 for an employee client. Our client, a Trader working in London for a multinational bank, was placed at risk of redundancy. We successfully negotiated a large and complex settlement package for him, covering issues such as share options, a wide range of contractual benefits and over £280,000 in compensation for loss of office alone.

How much does Settlement Agreement Negotiations cost?

Employers will very often make a contribution towards your legal costs in obtaining advice on a settlement agreement (once agreed), ranging between £250-£500+VAT.

The reason for this is because employees are legally required to obtain independent legal advice on a settlement agreement.

This allows us to provide you with a FREE service once the terms of your settlement agreement are finalised. We offer an online settlement agreement service which allows you to upload your settlement agreement and have it reviewed by a member of our Employment Law Team free of charge and receive a call within the hour.

Settlement Agreement are used for redundancy, working disputes or when settling potential or actual Employment Tribunal Claims.

We offer clients an online Settlement Agreement review service. You need only answer a handful of simple questions and one of our Employment Law Team will review your Settlement Agreement completely FREE of charge.  

Five Key Rules for Negotiating a Settlement Agreement

We appreciate that not everyone will be in a position to instruct a lawyer to represent them. Indeed, they may prefer to do any negotiations themselves. Therefore, we set out below the five golden rules in when negotiating a settlement agreement:

  1. Label all negotiations ‘Without Prejudice’ – Any emails, letter or conversations you have with your employer (or their representative) should be marked ‘without prejudice’. This ensures that anything you say in correspondence/conversation cannot be subsequently used against you should your matter not settle and you then need to being an Employment Tribunal claim.

  2. Don’t panic over deadlines set by your employer – many employers will often sent very tight deadlines for you to agree settlement terms offered to you. Don’t panic. These are pressure tactics. Take your time and even if you miss these deadlines, it remains highly unlikely that your employer will walk away from negotiations, especially where they were the ones to offer you settlement terms in the first place.

  3. Ask for more than what you expect to get – as in any negotiations, always aim high. Better to factor in a ‘cushion’ between what you have asked for and ultimately what you would be happy with, than asking for too little and wishing you had asked for more. This a careful balancing exercise and you should consider closely where this ‘sweet spot’ lies.

  4. Get a good reference include – entering into a settlement agreement is most likely to result in the end of your employment. Therefore, you need to think of the future and what is going to help you going forward in securing new employment. A good reference is key in doing so. Employers will commonly provide either no reference or a basic factual reference (confirming only your name, role and dates of employment). Always try and get a positive reference. When pushed many employers will happily provide one, especially where the only alternative is paying more compensation.

  5. Always try to get much compensation as possible – previous obvious right? Not quite. Many employees spend too much time arguing over contractual benefits and entitlements, all of which are very tax inefficient. Tax law allows to you pay no tax whatsoever on compensation payments for loss of employment up to a maximum of £30,000, much like a statutory redundancy payment. This allows you to keep 100% of any increase obtained.

Whatever the issue, Attwells are on hand to help you get the best possible outcome.

To find out more, call us on 01206 766333 or email us.