For what reason can I ask my employee to sign a Settlement Agreement?
If your employee signs the Settlement Agreement you present, then they are surrendering their rights to make a claim against you in a Court or Employment Tribunal for all claims listed in the Agreement. This means that all possible claims against you need to be separately listed in the Settlement Agreement. The only exclusion, where an employee would not relinquish their right to bring a claim, having already signed the Settlement Agreement, is where an employee is persuaded into entering into a Settlement Agreement and the facts have been misrepresented.
How do I know that I am offering a fair sum in the settlement?
What you decide to offer under a settlement agreement largely depends on the circumstances concerning the termination of employment. Your employee will go through the circumstances of their termination with their solicitor to find out if they could have made any potential claims against you.
The settlement should also ascertain whether the sum offered compensates them for the rights that they are giving up. Another consideration might be how long it would take your employee to find another job which comes under loss of earnings.
What does a “protected conversation” mean?
As an employer, you can have a confidential pre-termination conversation which lets you and the employee have a discussion without allowing both of you to take the discussion further into an employment tribunal proceedings. This is known as a protected conversation.
It is important to note than the protection relates to conventional unfair dismissal claims only, not any other claims such as discrimination. You may also lose this protection if there was any evidence of you behaving inappropriately and putting unwarranted pressure on your employee.
In what timeframe does my employee have to decide whether they want to accept the Settlement Agreement?
According to ACAS guidance you should give your employee a minimum of 10 days to decide whether they want to accept a Settlement Agreement. You should not act inappropriately by putting pressure on your employee to accept a Settlement Agreement.
How much should I contribute towards my employee’s legal fees?
For a fairly straightforward settlement agreement, you will usually contribute between £300.00 and £500.00 plus VAT towards the cost of your employee obtaining independent legal advice. If there is a complicated case, which their solicitor will have to go through at some length, it may be fitting to offer a higher contribution.
Why does my employee need their own solicitor for a Settlement Agreement?
This is a legal requirement associated with Settlement Agreements, so that the employee understands their rights and the implications of signing the agreement.
Without legal advice, the Settlement Agreement would not be enforceable. The employee must have their own neutral adviser to sign the Agreement to confirm that independent advice has been given. Advice can only be given by a qualified lawyer or a certified trade union official or advice centre worker. Any chosen adviser must have indemnity insurance.
Can my employee tell colleagues about the Settlement Agreement?
Settlement Agreements typically incorporate a confidentiality clause and your employee will not be able to divulge its terms to any third parties. Usual exceptions include your employee’s immediate family, professional advisers and HMRC, as long as they agree to keep the matters of this Agreement confidential.
Where can I get legal advice if Ito draw up a Settlement Agreement?
For all legal matters related to Settlement Agreements, contact JMR Solicitors, employment law specialists on 0161 491 3933.