If your employer wishes to terminate your employment they may ask you to consider signing a Settlement Agreement. This is common in cases of voluntary redundancy, early retirement or may be offered as an alternative to continuing with a disciplinary process.
You may also wish to approach your employer to see if they would offer a Settlement Agreement where you are leaving your employment because of concerns or grievances you may have with them.
A Settlement Agreement is a contract. Under the Settlement Agreement you agree that you will take no further action against your employer in relation to anything arising out of your employment relationship with them, and in return you will often receive a compensation payment. For an employer, it gives them peace of mind that no legal claims will be brought following the termination of your employment.
It is a requirement that you receive independent legal advice in relation to the terms and effects of your Settlement Agreement. Employers will usually make a contribution towards your legal fees for this advice and, in most case, we will agree to cap our legal fees at the amount of contribution so there is no cost to you.
When a Settlement Agreement is offered you should be given a ‘reasonable period of time’ to consider any offer and whether you would like to accept. You should not let your employer pressure you into making a rushed decision. What constitutes a ‘reasonable period of time’ will vary from case to case, but the ACAS Code of Practice on Settlement Agreements recommends that you be given “a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise”.
If you are offered a Settlement Agreement we can offer prompt and practical advice allowing you to make the right decision to accept the Agreement or not. We can also provide you with the required advice on the terms and effects of a Settlement Agreement to make it legally binding.
If you have a question about Settlement Agreements, or any other aspect of employment law then our employment team can help. Here at Beecham Peacock we have a trusted relationship with some of the largest trade unions in the country to protect your working rights. For further information call us on 0191 232 3048 or email enquire@beechampeacock.co.uk.
