by There are many different circumstances which can lead to the presentation of a settlement agreement, from businesses trying to cut costs through restructuring, site closures and redundancies to those that occur as a result of employee performance or misconduct.
In some cases, a settlement agreement doesn’t come as a surprise but for other employees, it can be a real shock that they are not quite prepared for when it happens.
We spoke to some experts in settlement agreements in Essex to find out what you should do if you are presented with a settlement agreement and the steps to follow to help make the process as straightforward as possible to achieve the best possible outcome.
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What is a settlement agreement?
The first important step is for you to understand what a settlement agreement is, why you have been presented with one and what you need to do next.
A settlement agreement is a legally binding contract between an employee and employer which sets out the terms of settlement for termination of the employment. These agreements will usually involve the employee waiving their right to bring any future claims against the employer, in return for a financial settlement.
Settlement agreements are useful for both parties as everybody knows where they stand legally and financially. They can be used for amicable termination of employment such as for voluntary redundancy or can be used for dismissals, as long as both parties agree to the terms.
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What to do when you receive a settlement agreement
If your employer presents you with a settlement agreement, here are the outlines of some basic steps that you should take.
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Seek independent legal advice
For a settlement agreement to be legally binding, the employee must seek independent legal advice from a suitable, relevant adviser such as a solicitor or qualified lawyer. Not only is it a requirement, but it goes a long way to helping to protect your best interests, ensuring that you receive specialist advice and guidance throughout the process and someone who can negotiate on your behalf to secure the best possible terms.
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Consider your options
Your solicitor will lay out your options to you but one thing you need to know is that you do not have to accept a settlement agreement, but the employer may still dismiss you if you do.
In most cases there are 3 options
- Accept the settlement agreement – this is quite straightforward and should be a fairly simple process.
- Negotiate – if your solicitor believes that the offer can be improved to your advantage then they can negotiate on your behalf.
- Turn down the offer – in which case you may be able to bring a claim against the employer, however, there is no guarantee that you will be awarded as much money as the settlement agreement.
No matter what you decide, be sure to take on board the legal advice given by your solicitor and weigh your options to ensure that you are happy with the path you choose.
