Exit Packages & Settlement Agreements

Exit Packages and Settlement Agreement Solicitors

Exit packages and settlement agreements, also known as compromise agreements, are often used to quickly exit employees without a lengthy disciplinary process. The agreement is legal binding and waive an employee’s right to take any future legal action against the employer.

Negotiating a suitable exit package can have benefits for both the employer and the employee. An agreement will help to resolve employment issues swiftly and confidentiality without resulting in a lengthy disciplinary process or employment tribunal.

Settlement agreements protect businesses and provide security against any future legal action or breeches of confidentiality.

Along with the financial benefits, a suitable exit package will also protect an individual’s professional reputation and avoid the stress and uncertainty of litigation.

What should an exit package include?

An exit package should include all of an employee’s basic entitlements, including all pay they are entitled to up until the termination date, as well as details about whether the employee will spend some time on “garden leave”, pension matters, arrangements for the transition of the employee’s role during the notice period, and any continuation of any medical benefits.

Exit packages will often include enhancements to ensure the employee’s exit from the company goes smoothly, such as an additional amount on top of any redundancy payment if the employee has been made redundant, or if they have made a claim of discrimination or harassment, compensation should be offered in exchange for the employee renouncing their claim.

What does “Without Prejudice” mean in a settlement agreement?

“Without Prejudice” is used in settlement agreements to indicate that an offer is being made without any admissions of liability or fault, and if negotiations do not result in a settlement, the offer cannot be used as evidence in court.

How long do I have to accept or decline a settlement agreement?

Your employer should not force you to sign the settlement agreement straight away; if they do so you could use this as evidence to show that your employer has acted wrongly.

You should be given at least 10 days to decide whether you want to accept the settlement agreement. You must also take the advice of someone who specialises in settlement agreements, whether a lawyer, certified trade union official or advice centre worker.

How is the amount offered in a settlement agreement calculated?

The amount offered in a settlement agreement will vary depending on the situation.

You might be offered an amount for forgoing the right to bring a claim against your employer which will vary depending on the situation and how keen your employer is for you to sign the settlement agreement.

You might also get a sum reflecting what you could potentially be offered if you were to take your claim to an Employment Tribunal.

Why use Rothera Bray for exit packages and settlement agreements?

Rothera Bray’s employment team have experience of working for both businesses and individuals to help negotiate and advise on exit packages and settlement agreements.

We take time to understand the background and your desired outcome and provide pragmatic advice that focuses on reaching an agreement as quickly as possible.

We can advise on negotiating, drafting and enforcing settlement agreements, providing you with certainty and peace of mind that your interests are protected.

Natalie Abbott has over a decade of experience advising businesses on employment law, helping them to navigate difficult situations and potential pitfalls whilst saving time and money in the process. Get in touch with Natalie by email n.abbott@rotherabray.co.uk or by phone 03456 465 465.