Being offered a settlement agreement can be a confusing time for an employee. It is likely to signal the end of the employment relationship and while sometimes this can feel a relief for an employee, very often this can also be a worrying time. To make matters more confusing the settlement agreement document that an employee might be presented with by the employer means that the employee feels that they are required to make sense of what is often a long and complex legal document.
Many employees will not have seen a settlement agreement before so what should you do first? Well, put simply, the first thing to do is to pick up the phone to an employment solicitor. A good employment solicitor will have seen numerous settlement agreements and they will be able to offer you support at an early stage. It is also important to note that a settlement agreement will also not be legally binding unless a solicitor or qualifying adviser has advised upon the agreement as this is a statutory requirement.
Okay, so you have phoned a solicitor but what other points are you, often in conjunction with your adviser, going to need to consider? Amongst the key points that you will need to think about are:
- The proposed timing of the termination of your employment and the notice that is due. Is there going to be a significant delay between signing the agreement and the proposed termination date and how is this dealt with under the agreement?
- The reason for termination and how this will be reflected in the agreement. Also how will any announcements about the termination of your employment be handled?
- Will the agreement be confidential?
- Are there any restrictive covenants that are included in the agreement?
- What is the value of the settlement package on offer (having regard to your salary and contractual entitlements)? How will holidays be handled and are you due any holiday pay for untaken annual leave upon termination? Is there room to negotiate an increase to the settlement package?
- Where there is a discretion that can be exercised by the employer e.g. in relation to bonuses, how is this being dealt with?
- How will any company property that you have be dealt with and when will it need to be returned by?
This is a complex and difficult time but don’t worry, we are able to advise upon what the agreement means for you and explain the effect of the terms that you have been offered.
For more information and guidance please call Emma Monk on 0121 312 5178 or email firstname.lastname@example.org
Thursfields has a team of Employment Law Experts with offices in Birmingham, Halesowen, Kidderminster, Solihull and Worcester. Whether you are an employer or employee, it’s important you get the right advice at the outset.