Settlement Agreements

Settlement Agreement FAQs

• Why does my employer want me to sign a settlement agreement?

  Your employer might ask you to sign a settlement agreement so they have security that you will accept the settlement and not take them to court or pursue legal proceedings for further compensation.

  However, there is not always an existing dispute between the parties and settlement agreements are often used as a means of bringing employment to an end on mutually agreed terms. They can also be used to avoid the need for a stressful consultation or internal management process.

• My employer is only contributing a small amount towards my legal fees, what are my options?

  Our fees for advising you in relation to your agreement start at £500 plus VAT at 20%. If, following our initial meeting, you instruct us to negotiate on your behalf fees will be higher.

  We will always provide you with details of our likely costs before they are incurred. If your employer is only willing to provide a low contribution, we can seek to negotiate a higher sum on your behalf.

• Can I reject the settlement offer?

  You do not need to accept the first offer that your employer gives you. You may wish to negotiate the amount of compensation and the terms if you are not happy with them.

  You may decide not to enter into the agreement at all and where appropriate, we will advise you in relation to alternative recourse available. For example, lodging a grievance or pursuing a claim against your employer.

  However, it is also important to remember that the terms of the settlement must be agreed by both parties and, depending on the circumstances, if you decide not to accept the proposal your employer might be able to fairly dismiss you or you might not get a better offer.

  At Rothera Bray we can help you to get the best agreement for you. This includes negotiating the amount of compensation you will receive and considering what effect the agreement might have on your future job prospects.

• When will I receive the agreed settlement agreement payment?

  The agreement will clearly set out the timeframes for payment. Compensation is typically paid within 28 days of all parties signing the settlement agreement or your last day of employment (whichever is later).

  Other payments such as outstanding salary, accrued holiday and bonuses may be paid through payroll on the usual payroll date.

• My employer has mentioned a reaffirmation agreement, what is this?

  You may be asked to sign a settlement agreement where you will continue to work for your employer for a period of time before you leave (e.g. if you are required to work your notice period).

  In these circumstances, your employer might ask you to sign a further agreement (known as a reaffirmation agreement) closer to your end date. This may include restating some of the terms of the agreement you previously signed, and a settlement and release of any additional complaints which may have arisen during that period.

  Your solicitor would review the terms of any reaffirmation letter at your initial appointment to ensure it was reasonable and arrange an additional appointment with you closer to the termination date to go through the reaffirmation.

• Do I have to wait for my employer to offer a settlement agreement or can I ask for one?

  You might be able ask your employer for a settlement agreement in cases where you feel like you are being managed out of the office or where there are tensions between you and your employer which are unlikely to be resolved.

  If you are considering asking for an agreement, your solicitor can advise you how best to approach this conversation.

• How long do I have to sign a settlement agreement?

  Your employer should not pressure you to sign the settlement agreement straight away. ACAS guidance suggests you should be given at least 10 days to decide whether you want to sign the agreement and to take legal advice.

• Should I accept the first settlement offer from my employer or can I negotiate?

  If you believe the settlement agreement is fair and offers you the level of compensation you expect then you may be willing accept it.

  Even if you are happy with the offer you have received, a settlement agreement needs to be checked over by a qualified solicitor before signing. This is in order for it to be legally binding and to make sure it protects your rights.

  In some cases, your solicitor can work to negotiate a better deal for you. This is true not only of the amount of money you have been offered, but also the wider terms of the agreement, such as the scope of any post-termination restrictions which will apply after you leave.

• How do I decide if the settlement agreement offer is fair?

  Firstly, it’s important to make sure the agreement covers your basic contractual and statutory rights. Then look at what your employer is offering you in addition.

  The decision as to whether it is fair will also be based on the facts relating to why your employer has chosen to end your contract.

  Your solicitor will be able to help you decide whether the offer is reasonable. Where necessary we can advise as to whether you may have a case which is strong enough to take to a tribunal or court. We can consider what you might be awarded if you were to go to a tribunal rather than accepting a settlement agreement.

  If you are happy that the offer is fair your solicitor will sign off the agreement to ensure you receive the settlement sum promptly.

  If you do not think the amount of money being offered is satisfactory, we can negotiate on your behalf to get a fair sum.

• I am happy with the offer I have received. Do I need to see a solicitor before I sign my settlement agreement?

  Yes, you need a qualified solicitor to check over the settlement agreement to make it legally binding.

  Seeking legal advice also provides you with the opportunity for your solicitor to review the agreement. As a result, they will make sure the terms are reasonable and your rights are protected.

• What happens if I or my employer breach the terms of the agreement?

  If either party breaches the agreement, then a claim can be brought for breach of contract.

  The agreement can be breached in various ways, such as the employer failing to pay an agreed sum of money or the employee bringing a claim against an employer despite agreeing not to under the terms of the agreement.

• How long does it take to finalise a settlement agreement?

  If you are happy with the terms agreed in the contract you may decide to sign the agreement at your initial meeting with us.

  However, if your solicitor feels some of the wording needs changing within the agreement, or you instruct them to negotiate a larger sum of money for you, then they will need to go back to your employer and await their response.