Gross Misconduct Settlement

Q: My employer terminated my employment last week for gross misconduct. They’ve offered me a settlement agreement paying me my months’ notice pay. I accept I was guilty of misconduct but feel the procedure was unfair and they could have given me a warning.  Also, I’ve heard I can claim compensation because my employer didn’t issue me with an employment contract. Is that right and what could I expect to get? Should I mention this to try and get better a better deal?

Jonathan Holden, Partner and Solicitors answers…

An employee who is summarily dismissed for gross misconduct is not entitled to a notice payment.  Your employer’s offer of 1 month’s pay in lieu of notice (which you may be able to receive tax-free as you do not have a written contract of employment) is therefore more favourable than you would otherwise receive.  For that reason, you may decide to accept the offer.  Alternatively, you could seek to negotiate an increase in the amount payable under the agreement; or the inclusion of, for example, a suitable reference.  However, before deciding to go down either route, you should consider the implications of signing a settlement agreement.

Once the agreement is signed, you will lose the ability to pursue any Employment Tribunal or Court claims arising out of your employment or its termination.  You are also likely to lose the ability to appeal against your dismissal on the grounds of gross misconduct.

Whilst you accept that you were guilty of misconduct, I note that you believe that the sanction you received was too harsh.  You also believe that the procedure followed by your employer was unfair.  Both of these factors are valid grounds for an appeal against your dismissal, and could also give rise to an unfair dismissal claim (assuming that you have over two years service and therefore qualify for bringing such a claim).  Your lack of a written contract of employment would not give rise to a stand-alone claim in the Employment Tribunal.  However, it could be tagged onto an unfair dismissal claim which, if successful, would result in you receiving an additional 2 or 4 weeks’ gross pay as compensation.

Taking this into account, you may choose to reject the offer of a settlement agreement in favour of pursuing an appeal (which, if successful, could result you receiving a lesser sanction).  Even if your appeal is unsuccessful, you would then still be able to consider bringing unfair dismissal claim; and you may even find that your employer is still willing to offer a settlement agreement to you after the appeal process has been exhausted.

Answer given on 9 June 2014.


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