Things You Wanted To Know About Settlement Agreements…
Reasons to choose Wilson Browne
… but didn’t know who to ask.
You may have heard of Settlement Agreements under their old name of “Compromise Agreements”.
These are binding agreements between an employer and an employee where you (employee) agree to settle your potential claims: in return, the employer will generally agree to pay financial compensation. Settlement Agreements are typically associated with the ending of someone’s employment and tend to be issued shortly before or after the employment has ended (they can be used when employment is going to continue, but let’s focus on a situation where your employment is ending).
What should you do if you are unexpectedly offered one?
You may be invited for a “protected conversation” often referred to as “without prejudice” or “off the record”. That can be a nasty surprise but don’t panic – stay calm, let the employer do the talking and make notes. Nothing you agree to during the meeting will be binding until you have taken legal advice, and to be binding, the employee must get independent legal advice first.
Your other worries…
…Will probably be around the future, money, and also worrying about what legal advice is going to cost. At Wilson Browne, we’re used to people phoning with common questions where this has happened to them, so we offer a FREE 15 minute chat with an employment lawyer specialising in settlement agreements: no strings, no catches, no obligation.
Temujin Erdene–Ochir, a member of our employment team, brings extensive experience in advising on settlement agreements. Many people aren’t aware that these agreements often include more than just compensation, they can cover confidentiality clauses, references, and even future employment restrictions. Temujin ensures clients understand their rights and obligations fully before signing, helping them make informed decisions and negotiate better terms where possible.
What do you find rewarding about settlement agreements?
As an employee myself, I can sympathise with others being placed in a situation where in the space of a week, they’re required to agree the end of their employment, seek advice, consider whether the proposed terms are acceptable and face the daunting prospect of re-entering the job market.
Discussions over a settlement agreement often arise through no fault of the employee and they’re sometimes set arbitrary deadlines and asked to give their response in a matter of days (though at least 10 calendar days should be provided). This can be an extremely stressful situation, especially with the financial uncertainty and insecurity that could follow.
Whilst I appreciate the loss of one’s job (especially one that they are passionate about) cannot necessarily be rectified by a financial package, I do find it rewarding if I’m able to ease the burden by negotiating and securing better terms, so that they can have an extra layer of financial security, as well as helping them to understand what they’re agreeing.
What are the 3 key things an employee should think about?
First of all, try to stay calm and don’t make any rash decisions. Situations such as these can be stressful, and you may regret making any emotional decisions further down the line. Give yourself a little time to process what is happening.
Secondly, consider the circumstances you are in – what is being offered, why is it being offered and what would be your ideal outcome.
Lastly, contact us for legal advice as soon as you can after steps one and two.
Can you do same day signoffs?
Nothing is impossible! There are situations where same day signoff is possible, especially where the employee is happy with the terms of the agreement and there are no significant changes required.
Provided that the employer is responsive, we can get the settlement agreement signed on the day of the advice. However, we cannot promise that is always possible. If there are negotiations to be had or there needs to be broader changes to the terms (which in some cases, can only be identified following the advice), it may take a few days. Regardless, we always try to reach a satisfactory agreement as soon as possible.
Who pays for your help with settlement agreements?
Generally, the employer will contribute to the employee’s legal costs, and this will be specified in the agreement. If the employer’s contribution does not cover the employee’s entire costs, we can negotiate this on their behalf. We always strive to get the employer to cover as much of the costs arising out of the settlement agreement as possible. Most of the time, legal costs are fully covered by the employer.
Can you get an employee better terms?
Whilst this is not something that we can promise as negotiations are not an exact science, we would do our best to get the employee the best deal possible. We can negotiate with the employer on the employee’s behalf, or we can give specific pointers for potential amendments that could or should be made. In the latter situation, the employee would negotiate on their own. However, in the vast majority of cases where the employee is not satisfied with the initial settlement agreement, we manage to negotiate better terms.
What would your clients say about you?
In the Legal 500 (the who’s who in the legal world), I was testified as “a dedicated and highly reliable professional who is extremely responsive and attentive…knowledgeable in employment law and takes the time to provide clear and concise advice”.
However, in my own words, I would like to say that I genuinely care about my clients. I do not look at these matters as another client or one more settlement agreement to advise on, but rather – “this person is going through a terrible situation, the least I can do is do the best I can to make things easier for them”.
Whilst I cannot guarantee the perfect outcome (and frankly, anyone that does, you should steer clear of them), I can guarantee that I will be in your corner.
If you were an animal, which one would you be and why?
I would definitely be my dog, Peach. She is a toy poodle and despite her miniature size, she has the courage and feistiness of a tiger, but soft and gentle when she has been fed and has had enough sleep.
For information on the intricacies of settlement agreements, please see our guidance, here and here.