| W.E.U Admin | Workplace Wellbeing
It is not every day that you leave a job. In most cases, people resign because they have secured another position. However, if your employer initiates the departure, a settlement agreement may be offered. This protected conversation process is embedded in UK legislation and often arises in redundancy situations or reorganisations.
What Is a Settlement Agreement?
A settlement agreement is a legally binding contract in which you waive certain employment rights in exchange for financial compensation. Formerly known as a “compromise agreement,” it allows both parties to avoid lengthy disciplinary or performance-management procedures.
Why You Need Legal Advice
To ensure you validly waive your rights, the legislation requires you to obtain advice from an independent adviser—typically a solicitor. Employers usually make a contribution towards legal fees, which can sometimes be negotiated upwards to cover extensive negotiations.
Key Terms in a Settlement Agreement
The agreement must clearly set out the payments and obligations involved. Typically, you should expect:
- Salary and benefits up to the termination date
- Notice pay
- Accrued holiday pay
- Compensation payment (including statutory redundancy pay, if applicable)
Additional clauses often cover future conduct, such as:
- Confidentiality
- Reference provision to prospective employers
- Public statements about your departure
- Non-derogatory comments
- Return of company property
Your solicitor will advise if the wording is fair and whether you should seek a better settlement.
How Long Do You Have to Accept?
Under the ACAS Code of Practice on Settlement Agreements, you must be given at least 10 days to consider the formal written terms and obtain legal advice. Your employer should also allow a reasonable period beyond that minimum if circumstances warrant.
Next Steps
If you’ve been offered a settlement agreement, consult a specialist employment solicitor. They can:
- Identify potential claims and likely tribunal awards
- Assess whether the proposed terms are reasonable
- Negotiate improved compensation and terms on your behalf
Your departure’s handling can impact future job prospects, so it’s vital to secure the right expertise.
Article by
workersofengland.co.uk | Independent Workers Trade Union
This Article is Tagged under:
Legal
