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Written by Sally Hubbard. Posted in Blog
I have helped numerous clients with their Settlement Agreements (previously known as a Compromise Agreements) over the years. Every client has a different reaction or goes through a different process when considering a Settlement Agreement. More often, the employer will offer a Settlement Agreement to the employee. However, there might be occasions when the employee wants to initiate the process of leaving their employment. This post deals with that situation.
A Settlement Agreement is a contract between an employer and an employee which, usually, sets out terms for the employee to give up their job, their employment rights and any Employment Tribunal claims they may have in exchange for a compensatory payment from their employer.
A Settlement Agreement can be offered for many different reasons. Sometimes the offer is as a result of a dispute, sometimes it is to volunteer for redundancy, sometimes it is an amicable parting of the ways. Whatever the reason, you need to make sure you are making the right decision for you.
The starting point is to make sure that you do not make a request to leave your employment or for a Settlement Agreement in an open discussion or correspondence. Open discussions and correspondence can be used in future Employment Tribunal or Court proceedings. Essentially, they are “on the record” and in the event of litigation could damage either your ability to pursue your claim and/or limit the amount of compensation you could receive.
The very heart of a request for a Settlement Agreement is a negotiation. You and your employer should be able to be full and frank in those negotiations, without the fear that a concession you make in discussions or correspondence could affect you later if no deal can be agreed and litigation becomes necessary.
There are two main ways to achieve this:
This is a meeting, discussion or exchange of correspondence whereby an employer and employee will negotiate bringing to an end the employee’s employment. Without Prejudice meetings, discussions or correspondence are kept “off the record” and cannot be referred to in any later Employment Tribunal or Court litigation.
You will need to tell your employer that you are making a Without Prejudice offer or want a Without Prejudice meeting. The easiest way to do this is to put a header on any letter or similar stating “Without Prejudice”. Alternatively, if you want to start a discussion or meeting, you should be clear at the outset that you want such discussion or meeting to be “Without Prejudice”.
You need to make sure you attend any meeting or set out your correspondence with a clear idea of your potential claims, their likely value and how you would like the situation to be brought to a conclusion. This will usually mean what offer or Settlement Agreement terms you would like to put forward.
Again, this is a meeting, discussion or exchange of correspondence whereby an employer and employee will negotiate bringing to an end the employee’s employment. As above, a Protected Conversation is kept “off the record” and cannot be referred to in any later unfair or constructive dismissal claim at the Employment Tribunal. Please note, the same protections will not apply to discrimination or other employment law matters. This is why most Protected Conversions will also be stated as being Without Prejudice.
You will need to tell your employer that you want to have a Without Prejudice, Protected Conversation. It would be helpful to reference the Employment Rights Act 1996, Sec 111A. Again, you need to make sure you attend any meeting or set out your correspondence with a clear idea of your potential claims, their likely value and how you would like the situation to be brought to a conclusion. This will usually mean what offer or Settlement Agreement terms you would like to put forward.
To be clear, you should only be using Without Prejudice or a Protected Conversation where you are negotiating with your employer. You should avoid using these terms in any meeting or correspondence where you might want to rely on such meeting or correspondence in future litigation. For example, if you are submitting a grievance, whistleblowing, tendering your resignation etc then you will want to rely on that document or meeting at the Employment Tribunal.
It is important to keep what you might want to rely on as evidence separate from any negotiation using Without Prejudice or a Protected Conversation. For example, it is usual to send an open grievance to an employer at the same time as sending a separate letter marked as being Without Prejudice with a Settlement Agreement offer. In such circumstances, if a deal can be done and there is a Settlement Agreement, all to the good. If there is no deal or agreement, the grievance can still be relied upon at an Employment Tribunal or Court.
We understand that agreeing a Settlement Agreement will always be an important and personal decision for clients. Anyone considering a Settlement Agreement should ensure they have as much information as possible. If you need help asking your employer for a Settlement Agreement and are looking for the right solicitor to help you, call us on 01522 440512 for a free, no obligation consultation. For more information about Settlement Agreements, please visit our website at https://lincslaw.co.uk/services/settlement-agreement/
Managing Director, Specialist Employment Law Solicitor
Lincs Law Employment Solicitors, Lincoln
Sally is a Lincolnshire girl through and through and has lived in Lincoln her whole life (apart from a brief spell when she went to university in Nottingham, but we don’t talk about that). She began her career with Lincolnshire County Council qualifying as a solicitor in 1996, which she believes now makes her "vintage".
