settlement agreement solicitors
Settlement agreement solicitors
At Landau Law, we are specialist settlement agreement solicitors and have advised on thousands of negotiations for departing employees with very high success rates.
If you have been given a settlement agreement, or are looking to negotiate your departure, please click here to complete the contact form, or email us at email@example.com or call us on 020 7100 5256.
This page deals with issues specifically surrounding negotiations. If you would like to visit our main settlement agreement page, please click here.
Who drafts the settlement agreement?
Usually, your employer will provide the initial draft and sometimes this will be generated by your employer’s solicitor. The reason for this is that the settlement agreement is usually biased towards your employer as most clauses are intended to prevent you from making any claim.
How long does it take to finalise the agreement?
We can usually turn this around within days with the co-operation of your employer, but it can take up to a week or longer for more protracted negotiations. This is especially the case if there is no consensus on some core issues.
When are protracted negotiations more likely?
This will depend on factors such as:
-your seniority and pay, together with the level and intricacy of the package on offer.
-how well the settlement agreement is drafted, and whether it is too biased towards your employer, with only limited protection for the employee. For example, there would need to be adequate mutual non-derogatory clauses, and suitable wording surrounding an agreed reference.
-whether you are departing on acrimonious or more neutral terms.
Why might it be better to conclude negotiations more quickly?
This may be because:
- You are getting close to the deadline for which you will need to start the employment tribunal process. This is 3 months less one day from the last day of your paid employment, or the last act of discrimination. The case would need to be lodged with ACAS under their early conciliation process within this period, otherwise you will be time barred.
- There may be adverse publicity or reputational damage to you and/or your employer. If the settlement agreement can be concluded, there will be binding confidentiality provisions which are usually in both parties interests.
- It stops other staff members becoming aware of the circumstances of the dispute. The earlier the dispute is wrapped up within a NDA, the more likelihood there is to keep everything under wraps.
- If there are protracted negotiations, the parties tend to become more entrenched and this can sway towards an unresolvable outcome.
What does the ACAS 10 day cooling off period say?
Under the ACAS Code Of Practice in relation to settlement agreements, an employee should be given a reasonable period of time to consider the proposed settlement agreement. What constitutes a reasonable period of time will depend on the circumstances of the case. However the guide says a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise
A failure to observe the ACAS Code does not in itself render your employer liable to any proceedings. However, if employment tribunal proceedings are brought, the Code is admissible in evidence, and the tribunal can take a breach of the Code into account if relevant. This would include where there has been “improper behaviour” and a bullying approach to sign a settlement agreement may well be covered under this banner.
In reality, many employers give a far less deadline than 10 days to get the agreement signed, regardless of what the ACAS Code says.
What kind of issues will need to be considered prior to the drafting of the settlement agreement?
-the termination date.
-the reason for termination.
-whether you are working your notice, being put on garden leave, or being paid in lieu of notice (“PILON”).
-what financial package is on offer. This will usually be a mix of notice, redundancy payment, holiday pay and an ex gratia compensation sum. Any outstanding bonus or payment for share entitlement will also need to be addressed, as well as pension and other benefits.
-will you be treated as a “good” or “bad” leaver in accordance with the various share plans?
-will there be a reference?
-will there need to be an announcement to explain your departure?
At what point in time will negotiations for a settlement agreement take place?
This will be typically:
– when your employment has already terminated;
– when you are still in employment and working as usual;
– when you are off sick;
– when you have been suspended during a disciplinary process;
– when you have been sent home and asked not to come into work pending discussions.
It is usual that you have more negotiating power when you are still working and not under notice. This is because whilst you are still at work, you retain your full employment rights (especially if you have more than 2 years’ service). You also potentially remain a “thorn in your employer’s side” that needs to be resolved. Once you have already resigned and/or been given notice, however, there is a clear timeline for your departure whatever happens.
Is it necessary to refer to the reason for termination in the settlement agreement?
It is not always to do so, and many employees understandably don’t want any reference to poor performance or disciplinary referred to -especially where the parties have reached agreement of other terms. Similarly, some employers may resist about the document referring to redundancy as a reason for termination, because they don’t see the situation as one that falls into this category. Some individuals need this wording, however, to claim on their redundancy insurance and where they see their position as clearly redundant, negotiations will ensue about how best to set this out in the settlement agreement.
If you work in the financial services industry, your employer may have a duty to disclose details about your departure to a regulatory body. Similarly, if you are a teacher, any dismissal involving child welfare issues must be notified to the Disclosure and Barring Service.
How easy is it to negotiate an increase of termination payments?
The amount you receive under a settlement agreement will be central to whether a deal can be brokered or not. As specialist settlement agreement solicitors, we have negotiated on thousands of exits for departing employees and senior executives with very high success rates.
There is usually a reasonable chance of increasing the amount of financial settlement if there is already an offer on the table, depending on the strengths of your legal position. Even without any existing offer, if you have a good claim, there will still be an incentive for your employer to settle. Every case is dependent on its merits, however.
Within the negotiations, it may also be possible to seek a more tax efficient way for the settlement sums to be paid, for example having part of the termination payment paid into a pension scheme or deferring some of the payments into the new tax year.
What is a two-stage settlement agreement process?
Where you have a long period of time between the signing of your settlement agreement and the termination date, your employer will often ask you to sign a second (much shorter) agreement at the termination date which reaffirms your warranties in the first agreement. You are also confirming that you are not aware of any new claims since you signed the first document.
In fact, the first agreement would be expressed to be conditional on the signing of the second one. This is entirely usual, and you would need further independent legal advice on both agreements.
It is unusual to receive any payment under the first agreement, until the second document has also been signed.
What is a protected conversation?
What does “without prejudice & subject to contract” mean?
This essentially means “off the record” and that there is no formal and binding deal until the settlement agreement has been signed by all parties. This allows parties to freely negotiate without ever being able to refer to the negotiations (save for exceptional circumstances). It is especially important if you are still employed, as your contract of employment carries on as normal- even though negotiations may be happening in the background.