Settlement Agreement Negotiations

Q: I’ve been offered a settlement agreement because my employer is unhappy with my performance. I think I should sign it and look for a new job but the money I’m being offered won’t tide me over for long. What are the main ways that I can negotiate a higher offer?”


Julie Taylor, Senior Associate at Gardner Leader law firm answers…..

You can either ask to have a further without prejudice discussion with your employer yourself to see if you can meet to negotiate the terms of the agreement directly or you can ask your chosen legal Adviser to negotiate directly with the company on your behalf. It can be more cost effective to negotiate yourself, but many solicitors will agree a fixed fee for the advice on the terms of the settlement agreement to include some negotiation on your behalf. They may also highlight other points to negotiate that you had not considered.

In terms of what can be achieved through the negotiation, this will depend on the particular circumstances in your situation. For example, factors such as length of service, the procedure followed, outstanding grievances, financial situation or the company’s ability to justify any performance concerns can all have an impact on your bargaining position.

The settlement agreement should deal with all your contractual entitlements to salary, notice and holiday pay. Once these have been addressed, the additional compensation can be negotiated, but how much the company is prepared to offer will be influenced by how responsible they feel in the circumstances. Clearly identifying the potential claims that you could pursue and the value of tribunal award that could follow is one way to negotiate or simply appealing for their goodwill on the basis of a quick and amicable agreement is another.

Ultimately, your employer will be mindful of the average and maximum awards made by employment tribunals in coming to any agreement as well as any established custom and practice within their business.

Answer given on 24 September 2015 by employment solicitor Julie Taylor, Senior Associate at Gardner Leader law.

IMPORTANT: The contents of this page are for guidance only and do not constitute legal advice. You should consult a solicitor without delay if you require legal advice on a particular employment matter.

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