Top tips if your employer offers you a settlement agreement

Problems at work? If your employer offers you a settlement agreement, here are five things you need to know.

Make sure your settlement is put in writing

Settlement Agreements are legally binding contracts and must relate to a particular complaint or proceedings.

Get expert legal advice

If your employer offers you a settlement agreement you must get advice from a specialist employment law expert - once you’ve signed it you won’t be able to present a claim at an Employment Tribunal on any aspect covered by the agreement.

Your chosen employment law advisor must hold a current contract of insurance or professional indemnity which covers the risk of any subsequent claim relating to losses arising from the advice. The agreement must name your adviser and confirm that any applicable statutory conditions regulating the settlement agreement have been met.

Take time to consider the content and implications of your settlement agreement

Employees should have a reasonable amount of time to consider the proposed agreement - the ACAS Code of Practice states that employees should be given a minimum of 10 calendar days, unless agreed otherwise.

Take a representative with you to any settlement agreement meetings with your employer

Although employees have no statutory right to be accompanied at meetings to discuss the agreement, it’s a good idea to have someone with you such as a work colleague or a trade union representative. As a matter of good practice, employers should allow an employee to be accompanied - in fact, this can often help progress settlement discussions.

If you’re not happy with the terms offered in a settlement agreement

Settlement agreements are voluntary and neither employers or employees are obliged to agree to them. If an agreement can’t be reached, it might be possible to resolve the issue through a performance management, disciplinary or grievance process, or through mediation. Employers should follow the Acas Code of Practice on Discipline and Grievance procedures (if the employee is dismissed, a failure to do so might present grounds for a claim of unfair dismissal). Again, a specialist employment law expert will be able to advise you on the best course of action.

For specific advice about settlement agreements or any other aspects of employment law, contact James Hodgson or Maureen Cawthorn on 01422 339600 or email law@wilkinsonwoodward.co.uk.

More about settlement agreements from ACAS