Ask an Expert: Accept the offer or you’ll be dismissed!

My employer has told me I will be dismissed if I don’t accept the settlement agreement. I feel under pressure to sign, what should I do?

Jemma Pugh, solicitor at Lester Aldridge LLP answers…

This will largely depend on the circumstances and the facts surrounding your particular situation.

If your employer has a reason to dismiss you – for example because you have committed gross misconduct, then provided they follow a fair procedure, it may mean that your dismissal would be fair. This may mean that you are more inclined to accept the package offered in order to avoid being dismissed.

However, if your employer has no such reason and is intending to dismiss you simply because you do not accept the settlement agreement, then this may be grounds upon which to bring a claim of unfair dismissal against your employer at an Employment Tribunal (assuming that you have the required qualifying period that normally applies for making such a claim, which is one year for employees employed before 6 April 2012 but 2 years for those whose employment began on or after 6 April 2012).

In order for a dismissal to be fair, an employer must have a potentially fair reason for the dismissal, which can be either capability, conduct, redundancy, breach of statutory duty and the “catch-all” category of “some other substantial reason”. A refusal to sign a settlement agreement does not fall under any of those categories and therefore your employer would not be able to show that there was a fair reason to dismiss you. In addition to having a fair reason, an employer must also follow a fair procedure in dismissing an employee. For everything other than gross misconduct, this would generally mean that you are given a series of warnings prior to being dismissed.

Furthermore, the general rule that settlement discussions are “off the record” and therefore not admissible as evidence in a Tribunal may not apply in this situation. Your employer’s conduct could arguably amount to ‘improper conduct’, particularly if this is before any disciplinary process has begun. It seems as though your employer is putting undue pressure on you to sign the agreement. This means that anything said or done in settlement discussions will only be inadmissible as evidence in claims to the extent that the Tribunal considers it just.

You will need to balance accepting the settlement agreement against any claims you may be able to make to an Employment Tribunal. It is important to factor in to this decision the time involved in making a claim, as well as the cost – remember that there is now a fee payable for making a claim to the Tribunal, unless you qualify for an exemption.  

It may also be worth exploring whether your employer would be prepared to negotiate on the amount offered under the settlement agreement so that you are able to agree an exit package which you would be willing to accept.

You should consult a specialist employment lawyer for further advice. They will be able to assist you with any negotiations or advise on any potential claim for unfair dismissal (in the event that you are dismissed). It is also a legal requirement to obtain advice from an independent solicitor prior to signing a settlement agreement.


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.

helping employees with settlement agreements since 2013