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Settlement Agreement: Do’s & Don’ts

Employment nowadays doesn’t always end with a presentation and a nice card.

Modern companies will usually have the law on their side if they decide that they want to make staff changes. But only if they go about it the right way.

It’s increasingly common for Employment Tribunal claims to be about the manner in which dismissal was done, as well as the reason for it.

Settlement Agreements are a recognised method by which the company can implement its plans, while at the same time recognising the entitlements of the employee. However, they will only be valid under employment law if they are handled in the right way:

DO: arrange a private conversation, away from the rest of the workforce, and some paid leave time afterwards to consider digest the news.

DON’T: escort someone from the premises, in front of their colleagues. Unless you have proof of gross misconduct or there’s an ongoing threat of some kind, this approach will be looked on as unwarranted and over-the-top.

DO: have the Agreement prepared by a reputable lawyer, and also get them to draft an explanatory letter, saying what should happen next. This should include directing the employee to obtain legal advice, as the agreement is invalid unless they have met with their own lawyer. The letter should also say that the company will meet with cost of this advice.

DON’T: tell the employee that your lawyers “will be in touch.” The lack of certainty, together with the implied threat, is likely to make the situation worse rather than better.

DO: provide an explanation of the reasons for the changes. Provided it’s done in the right way, a full and frank discussion can be had which is regarded as a “protected conversation”, meaning it can’t be used in any future legal proceedings, such as a Tribunal.

BUT DON’T: do this if the reason for dismissal is down to discrimination – e.g. “we are bringing in some fresh blood.” This won’t be protected, and could well be used against the company.

DO: offer a better financial package than the basic amount the employee would be entitled to anyway. Unless it’s for gross misconduct, they will be entitled to payment of notice, and if’s a redundancy situation, then their length of service has to be recognised.

DON’T: stop paying wages. The employee has to be given time to get advice, and usually they have to be paid during this period. If they are not, then they can justifiably claim they have already been dismissed, and the Settlement Agreement will become meaningless.

Beltrami & Co act for both employers and employees in situations where a Settlement Agreements are used, and our initial phone call is free.

Contact Our Employment Lawyers Glasgow, Scotland

Our renowned Glasgow employment lawyers are only a phone call away. We will be able to help you with all aspects of employment law in professional, approachable and affordable way.

Speak to one of our solicitors today for employment law advice because in this area in particular obtaining quick and relevant advice is critical to you chances of success.

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