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In this article one of our specialist employment solicitors, Chris Hadrill, provides a brief introduction on how much you should expect to receive for your settlement agreement (or, to put it another way, what a reasonable value is for a settlement agreement).

If you’ve been offered a settlement agreement or are looking to approach your employer to negotiate a settlement agreement then one of the first questions you will undoubtedly ask yourself is: “how much is my settlement agreement worth?”. Generally, when we’re considering how much a settlement agreement we’re looking at the ex-gratia (tax-free) value of compensation that you are being paid as compensation for the loss of your employment (to put it another way, we’re assuming for the purposes of this article that you’re going to be paid your minimum legal entitlements (notice pay, holiday etc.) under your settlement agreement and we’re therefore looking at what can be negotiated on top of your minimum legal entitlements.

In determining what monetary value is appropriate for your settlement agreement your solicitor will generally analyse your particular situation based upon two types of analysis: firstly, what (in your solicitor’s experience) would your solicitor normally expect you to be paid under your settlement agreement given your circumstances; and, secondly, given the particular circumstances of your individual case what is an appropriate amount for your particular settlement agreement?

In respect of the first question, the answer to this will obviously depend on what your circumstances are: if you have accepted voluntary redundancy then it is (generally) not possible to seek to negotiate the value; however, if you’re an employee being made compulsorily redundant (i.e. you’ve been told that you will be made redundant) and you’ve got more than two years’ continuous employment with your employer then what we generally tend to expect you to be offered as the ex-gratia (tax-free) amount is a sum of between one and three months’ gross salary as compensation for the loss of your employment (in addition to your notice pay, holiday pay, statutory redundancy pay (and any bonus, commission etc. if relevant)). The reason for this valuation is that the ex-gratia amount in a redundancy situation is normally principally based upon the loss of earnings (if any) that you will suffer as a result of the termination of your employment.

Although it may be possible to roughly estimate what value of compensation is reasonable in redundancy (and other unfair dismissal situations), the situation becomes a bit more complicated if you have other types of claims (for example, if you have a ‘whistleblowing’ and/or discrimination claim). In these circumstances the value of your claim will depend on, among other things, what has happened (i.e. what detriments you are alleging you have suffered), how hurt you have been as a result of what has happened, whether your employer’s conduct has been (broadly) malicious in nature), and what loss of earnings you have suffered as a result of what has happened – broadly, the more serious the case and the longer it takes you to get a new job, the more valuable (in monetary terms) your case is.

It is always advisable to get expert legal advice from an experienced specialist employment solicitor on your case, for two reasons: 1) in certain situations (particularly where you believe that you’ve been discriminated against, harassed, victimized or penalised due to ‘blowing the whistle’) your case may be complex and it may be difficult for you to untangle the various points of law – a specialist employment solicitor will be able to quickly analyse your case and provide you with the relevant advice; and 2) your employer will normally pay for most, if not all, of the cost of this advice.

As a final point, and this ties in with all of the above, you must have a reasonable and realistic expectation as to what’s achievable in settlement agreement negotiations: Employment Tribunal cases are generally not worth millions of pounds (although there are exceptions) and your employer (or their legal representatives) will generally be experienced in these types of negotiations and have a set view on what level of payments are appropriate – however, it’s your solicitor’s job to let you know what they think your case is worth and to do their best to achieve what you want in the circumstances.

 

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

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Testimonials

4.63 Average

30 Reviews

Anonymous

Immediate response to my initial enquiry. Very clear throughout the whole process and thorough and great communication which worked really well during quite a stressful time. Chris Hadrill was extremely helpful and made me feel at ease.

Posted 5 days ago

Nick D

I received a very professional service from Chris. The advice given really helped to leave me comfortable to sign the settlement agreement following my redundancy. Would be happy to recommend your services to others.

Posted 5 days ago

Anonymous

Excellent service from initial contact to deliverables.

Posted 1 month ago

Virginia K

Yes, Chris Hadrill answered all my questions and I feel more confident with my current situation

Posted 1 month ago

Anonymous

Chris Hadrill was referred to me my a friend of mine. I found the service to be efficient, quick and like Chris's direct approach to my work. Well done and thank you Chris!

Posted 1 month ago

Andy W

Very prompt & structured service that helped put my mind at rest at a difficult time

Posted 1 month ago

Anonymous

I have found Redmans to be very helpful, diligant and thoroughly professional when dealing with them, plus they gone that extra mile for me !

Posted 1 month ago

Anonymous

Thank you to Chris Hadrill at Redmans for his assistance in settling my case. I contacted him at the very last minute and he was happy to help me and managed to get everything done on time and in a very professional manner. I will definitely be happy to work with him again .

Posted 2 months ago

Redman's provided excellent legal employment advice for me during a difficult time in my employment. Chris was my lawyer, super efficient, quick, reliable and clearly very experienced in the matter. Could not ask for a better law firm to deal with your query if you are in need of some help. Would definitely use them again in the future. Highly recommending Chris.

Posted 5 months ago

Steven

Chris Hadrill was very professional and responsive. I would highly recommend him

Posted 5 months ago

Dinah

Very Efficient, with very quick email reply’s. I had a matter that needed resolving within a very short space of time and Redmans Solicitors were great with dealing with my matter quickly.

Posted 5 months ago

Ankar

At Redmans the solicitor that was dealing with me was Chris. He dealt with my situation smoothly with clear guidance and explanation

Posted 5 months ago

Anonymous

Clear, concise advice and guidance delivered by an experienced and very capable solicitor, within the timelines required

Posted 6 months ago

Anonymous

Very efficient service. I never had to wIt for more than a day for a reply to any of my queries and the matter was dealt with swiftly.

Posted 6 months ago

Anonymous

Very timely, thorough and helpful advice. Friendly and considerate of the needs of the client

Posted 6 months ago

Anonymous

Very prompt and attention to detail. Thank you for the service

Posted 6 months ago

Chris

Couldn’t be happier with how Redmans successfully handled our seemingly tricky case. By being clear and detailed every step of the way, with the utmost professionalism and courtesy, they made it an informative and eye-opening process, taking the stress out of the situation and ultimately delivered what you would want from such a service. I fully appreciate everything they have done, and if I am ever in need of such services in the future, they will be the first number I contact. Excellent.

Posted 6 months ago

Anonymous

Excellent work delivered with great quality

Posted 6 months ago

Dominic

Chris Hadrill was a great help both in terms of his advice and his expertise. He explained my options to me clearly and concisely enabling me to quickly make the right decision for me in the circumstance. I would not hesitate to recommend Chris or Redmans to friends or colleagues, and would certainly make Redmans my first port of call should I require a similar service in the future.

Posted 6 months ago

Kurt

Redmans gave excellent advice and helped me understand everything in clear concepts. Thank you!

Posted 6 months ago

Anonymous

Resolved my issues

Posted 6 months ago