Through a Settlement Agreement, you receive a termination payment in exchange for waiving your rights to bring claims against your employer for unfair dismissal, breach of contract or discrimination. It is not binding until you receive independent legal advice and your solicitor signs a certificate confirming you have received this.

Settlement Agreements are usually offered in the following circumstances (whether or not there is a dispute):

  1. Redundancy situation;
  2. Performance management at work;
  3. Long-term sickness;
  4. Transfer of business; and
  5. Means of settling a grievance.

How you deal with a Settlement Agreement depends on the circumstances, whether the correct procedure was used and whether you would like to remain employed. The reasons for a settlement offer may form the basis of a claim of unlawful discrimination or victimisation. For instance, this may occur if your employer has offered you a settlement agreement because you are pregnant or in attempt to encourage you to retire.  Before you sign it, it is important to know whether you have a potential claim against your employer so that the most appropriate strategy is used to negotiate the best terms for you.

Redundancy situation

If you have been told you are the risk of redundancy and you have been offered a Settlement Agreement you need to know (1) whether the correct procedure has been used and (2) whether they have offered you an alternative suitable position, if one is available. All this will have a bearing on the negotiations.

If you feel there is a suitable vacancy in a different department that you could work in but this has been overlooked you could raise this in your negotiations. If your employer then asks you to apply for it, you may want to consider doing this. Based on the assumption they no longer want you to work there, this may put pressure on them to increase their offer.

Performance Review

If you have been placed on a Performance Improvement Plan (PIP) you need to think about whether there is a basis for this. There may be a number of reasons why you may not agree with the PIP. This could be because:

  1. You have a personality clash with your line manager; or
  2. The targets and timeframes are unrealistic; or
  3. You have had no issue with your performance over the long period of service; or
  4. You have been placed on PIP while other members of your department have been offered a redundancy package.

If you do not agree with the plan do not sign it because it will be difficult for you to defend you did this later. Try to resolve the matter informally with your line or HR manager. If the matter is not adequately addressed then you may want to lodge a formal grievance and set out the reasons why you don’t agree with the PIP.

Raising a grievance

If you want to carry on working where you are then depending on the situation you may want to raise a formal grievance. When writing your grievance you will need to support it with evidence so it is important to keep copies of emails and records you think would help your case.

A Settlement Agreement can be re-negotiated simultaneously alongside the grievance process. We can help you through this process. It is important for you to obtain legal advice before you negotiate a severance package. For more information please contact Neemah Ahamed by calling 01206 700113 or email [email protected].