Top 5 Mistakes made in Settlement Agreements

If you have been offered a settlement agreement (formerly known as a ‘compromise agreement’) or if you are approaching settlement agreement negotiations with your employer, you may be wondering what you can do to reach the best possible outcome for yourself.

There are several strategies you can use to your advantage to strengthen your position when negotiating, but here are our five top mistakes to avoid:

1. Failing to React

You’re not obligated to sign the agreement, but you need to react within a time frame. The employment tribunal understands that such issues should not loom over an employer’s head for an unreasonable amount of time and therefore ACAS advises in its code that you should be given 10 days to get legal advice and respond.

If you do not respond, then the offer will most likely be withdrawn and will lead to your employer continuing or starting formal action e.g. capability or disciplinary processes.

2. Failing to get Advice from a Qualified Employment Solicitor

Without good legal advice:

• you are unlikely to know what kind of settlement you could be entitled to before it is too late; also

• your employer is more likely to take you seriously if they know you are backed by a reputable firm.

Any requests should be justified by explaining what is reasonable or is an early compromise in comparison to the legal claims you will be giving-up by agreeing to a settlement.

At Lawson-West, our expert solicitors can provide these necessary settlement tactics creating a better chance of your employer accepting your demands rather than taking you through an employment tribunal which can be stressful and drawn-out. We will also ensure you avoid any procedural mistakes which might jeopardise your chances of qualifying for the most favourable settlement possible.

3. Underestimating your position

You may feel you have no chance of negotiating a settlement agreement with a large organisation e.g. your employer has more experience and resources but they do have a business to run. Your employer will want the situation completed as soon as possible and, with the proper legal advice, this can work to your advantage.

Do not underestimate your position – your employer will not want the matter to go to an employment tribunal therefore be ready to make strong counter-offers.

Our expert employment solicitors can give you the crucial advice on what is reasonable to ensure your position is protected and we reach the best possible outcome.

4. Negotiate more than just Financial Compensation

The terms of negotiating a settlement agreement are quite flexible - you are not just bound to gaining financial compensation. You might overlook some terms which are non-monetary but are important to future employment or money-making prospects. This may include:

• agreed references you may need to present to future employers; and

• restrictions/non-compete clauses you may want to have rescinded or modified.

5. Missing Your Deadline for The Employment Tribunal
   

There are strict time limits in Employment claims - you have a time limit of 3 months after the last act to present a claim to the employment tribunal.

In case you cannot arrive to a mutual agreement within this 3-month period with your employer, or you feel aggrieved by an incident in the workplace, then you have the option of taking the matter to an employment tribunal and settlement negotiations could be restarted at a later point.

See also our helpful Guide to Calculate Settlement Agreements:

Our Specialist Settlement Agreement Solicitors are available to provide the appropriate advice and guidance in relation to any aspect of settlement agreements or employment law.

Please contact us on Tel: 0116 212 1000, alternatively complete the free Contact Us form and we will get in touch as soon as possible.

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