James Sommerville at Thomas Horton LLP solicitors answers…
It’s important to remember that if your employer puts forward a settlement agreement, also known as a compromise agreement, it does not have to be accepted by you. There are options available to you and it is best to seek legal advice from a qualified person, such as an employment solicitor, before responding to your employer. Get the solicitor to explain the legal jargon and make sure what is being offered is understood so you can make an informed decision and one that is best for you.
In the case of a settlement agreement, your employer will usually pay a contribution to your legal costs, in some instances this will cover your costs. A settlement agreement is a complex and lengthy document and you need to ensure that you know your rights and that you are being properly looked after. If you think the offer is too low, a solicitor can help you to negotiate the financial settlement with your employer. Your decision will be based on balancing the claims you may have against your employer against the compensation being offered, as well as taking into account the risks of taking your employer to an Employment Tribunal.
If the settlement agreement is accepted, there are advantages to the employee, including knowing what you will be paid (usually fairly quickly after signing the agreement). In addition, a settlement agreement can also deal with references, letting you know what your employer will say about you to future employers. But it is important to remember that in order for a settlement agreement to be legal and valid, it must be in writing and a solicitor must be able to confirm that the statutory requirements have been followed and complied with.
If an agreement can’t be reached, then your solicitor can help you to prepare for an Employment Tribunal and will explain the process and the risks involved. These risks include:
Your claim may be unsuccessful
You may not recover legal costs even if you win
You are labelled as a ‘difficult’ employee because you have taken your former employers to the Employment Tribunal.
This will be more so if you work in a niche sector.
If the correct advice is taken, a stressful situation can actually be a fairly smooth one and there is often a positive outcome for employees in terms of financial settlement and future career prospects.
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.