Why have I been offered a Settlement Agreement?
Settlement Agreements can be offered for a variety of reasons, nearly always linked to the termination of employment.
Possible reasons could include: a breakdown in the employment relationship; a potential redundancy situation; ongoing disputes; a way of reinforcing any restrictive covenants you are subject to; or reinforcing confidentiality obligations.
Often Settlement Agreements come about by way of mutual agreement and are seen as the best way to achieve a clean break.
What payments will a Settlement Agreement typically include?
A Settlement Agreement will normally provide for the payment of monies owed to the employee up until the termination date, including salary, commission, bonus, and any payment due in respect of accrued but untaken holiday and unserved notice. The Agreement will typically record any additional termination payment being made, which in redundancy situations may include a statutory redundancy payment. There will also usually be a contribution towards the employee’s legal fees associated with taking advice on the Agreement.
Is legal advice necessary?
Yes, for the Agreement to be valid you must take independent legal advice on it. One of our Employment Solicitors will be able to discuss the background of your employment, advise you as to whether you have any potential claims against your employer and advise you on the terms of the Agreement generally. An Adviser’s Certificate will usually need to be issued following our advice, which will often be referenced in the schedules of your Agreement.
I am not happy with the terms of the Settlement Agreement I have been offered. Can you still help?
Yes. Many employees who work with us are not happy with the terms they have been offered. Our Employment Solicitors can offer detailed advice on how and why to improve the terms of the Agreement and can negotiate on your behalf to achieve the best possible outcome. Over the years, we have been able to secure significant improvements to the terms of the Agreement and significant increases to termination and compensation payments.
I have been offered a COT3 – what is this and how is this different to a Settlement Agreement?
A COT3 is a form of settlement typically used in relation to a specific dispute between an employer and an employee. They arise following the Acas conciliation process whereby an Acas conciliation officer will use a COT3 to record the details and terms of a settlement. They can cover any and all claims, however, often cover specific claims alongside future claims.
Unlike a Settlement Agreement, you do not legally require independent legal advice for a COT3. This does not prevent you from obtaining legal advice in respect of the terms of the COT3 and its implications, and our team has extensive experience in advising on COT3s as well as Settlement Agreements. Your employer may offer a contribution to legal fees too.
