Settlement Agreements: What Employees Should Know?

If your employer offers you a settlement agreement, it can be a confusing and scary thing to accept. Settlement agreements are often given to employees when they are being made redundant so as you can guess, it’s not the most pleasant of times. Typically, the employee is given money in return for a specific condition or conditions, such as dropping the matter and not bringing up a future claim. Essentially, the whole process is a final sign-off before your employment is terminated.

At the point when you sign the agreement, your employment will be officially concluded and only then will you receive your compensation in return for losing your position and employment rights. If as the employee, you don’t sign you could face redundancy proceedings or a disciplinary procedure.

If you’re reading this as an employee, being handed an agreement, this article has been designed to give you the information you need to make this process as stress-free as possible. Here’s what you need to consider.

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What Is It?

Settlement agreements are legal binding agreements that outlines the specific terms of a settlement between the employee and employer. Each one will vary depending on the situation but typically the agreement will include clauses with the deal. The clauses can involve payments, tax implications, confidentially and even an agreed reference.

Changes to Settlement Agreements

Formerly known as compromise agreements, the difference now is that if you’re offered an agreement, it will typically come with a pre-termination deal attached with it.Termination negotiations, also known as protected conversations, have come into play to encourage employers to have honest and open discussions about ending their employee’s contracts. Within these discussion, conversations are protected and can’t be used in the future by either side for unfair dismissal claims.

What you need to wary of is that there can be can be certain exceptions made. The conversation you have is not protected by the new laws, in discrimination cases, whistleblowing or unfair dismissal cases. In this scenario, talks don’t have to be off-record if either party behaves unfair in the conversations. Take for example, pregnancy cases. If employers insinuated the woman should leave with compensation, the negotiations wouldn’t be protected if the employee felt it was only happening due to her situation. That is why it always pays to seek the help of maternity discrimination solicitors to rule out the possibility of wrong doing.In practice, the pre-termination negotiations may lead to more employers having conversations about termination, and offering settlement agreements, which the employee feels under pressure to accept.

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What to Do in This Situation

When you are taken in to one of these meetings and asked to leave, it is always a shocking moment – unless its expected. It is important, however, to remain level headed and take notes on what was said and what happened so you have evidence (if needed) for a later date.

From here you’ll need some professional advice. You can seek your own council but often, the employer will pay the costs for seeking the help of qualified advisors or settlement agreement solicitors. In this scenario, it is a legal requirement that sought out the help from a professional. An employment solicitor can help you consider whether you’re getting a good deal and whether you have any grounds for a claim against your employer – such as discrimination or unfair dismissal. To decide whether an agreement is a good deal, you need to consider why you’re being offered the agreement and what rights you are being asked to waive because of you signing. Furthermore, they can also help you negotiate a better deal, which may include a bigger pay-out. If you’re facing a period of unemployment, you need to be able to meet your household living expenses until you get another job. One of the considerations you need to make is whether the money that’s being offered is enough. It all comes down to what is best for your situation.

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