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Chris Hadrill, a specialist employment solicitor at Redmans, answers the question:

“Is it fair for my employer to offer me a settlement agreement as an alternative to dismissing me for performance-related reasons?”

The question of whether it is ‘fair’ for your employer to offer you a settlement agreement is, almost exclusively, yes – there is generally no prejudice caused to an employee by the simple offering of a settlement agreement. The question here, therefore, seems to be: are the terms of settlement that my employer is offering me fair? An analysis of this question will invariably hinge upon two factors: one, the circumstances of the dismissal and, two, the terms of settlement that you are being offered.

The circumstances of your (potential) dismissal are relevant in order to assess the strength of your potential claim for unfair dismissal and, in turn, the reasonable value of your unfair dismissal claim – the higher the value of your unfair dismissal claim, the more ‘leverage’ that you will have in negotiations regarding a settlement agreement. If you are an employee and have sufficient continuous service to bring a claim for unfair dismissal (2 years from April 2012) your employer must, broadly, make a decision to dismiss you that is fair and undertake a fair procedure in dismissing you; if your employer does not take such steps then you may have a successful claim for unfair dismissal.

If your employer has concerns about your performance at work then it should generally take the following steps to dismiss you in order to avoid a successful unfair dismissal claim: any minor concerns should be dealt with through day-to-day management and, with regards to any formal concerns about your performance it must undertake an assessment to determine whether any formal capability procedure is necessary; it must (among other things) inform you of the reasons why it believes that you are allegedly underperforming; and allow you to comment on any alleged underperformance at a formal capability meeting. Your employer should also provide you with reasonable training to allow you to improve your performance, undertake regular reviews of your performance with you, and give you a reasonable time period in which to improve.

Your employer may, prior to the start of the capability process, during the capability process, or after the conclusion of the capability process, offer you what is known as a “settlement agreement”: this is a contract (regulated by statute) by which you generally agree not to pursue certain claims against your employer in return for various benefits (financial or otherwise). Whether the terms of the settlement agreement are fair must generally be measured by two considerations:

  1. Whether, from the perspective of your legal adviser, the value of the financial compensation and other terms of the agreement are reasonable, taking into account the circumstances of your case; and
  2. What you wish to derive from the settlement process

It you have been offered a settlement agreement and are researching whether what you have been offered is fair (and have therefore come upon this article) it is, unfortunately, not possible in this article to offer you advice on whether the terms of your specific settlement agreement are fair – it is advisable that you consult one of our solicitors (or indeed another firm of solicitors) in order to discuss the circumstances of your situation with them (your employer will normally offer to pay fees of between £350 plus VAT and £500 plus VAT for the purposes of you taking advice on the agreement). So, if you’ve been offered a settlement agreement get in touch with us by giving us a call on 020 3397 3603 or email us on enquiries@redmans.co.uk

 

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

4.76 Average

172 Reviews

Anonymous

I had an employment issue which required legal advice. Chris was very supportive and knowledgeable, resulting in an optimum resolution in my favour. Would definitely recommend.

Posted 4 days ago

David M

Very professional and first-rate advice. I would use again. With thanks,

Posted 4 days ago

Anonymous

Got the job done swiftly without going too much in to detail.

Posted 4 days ago

Derek W

Redmans dealt with my case very efficiently and I was happy with the outcome.

Posted 6 days ago

Anonymous

Timely professional advice!

Posted 1 week ago

Anonymous

Very good service

Posted 1 week ago

Anonymous

I was in contact with Chris and then worked with Caroline on an employment matter. I was very pleased with the service and professionalism throughout, and came away with satisfied with the outcome. Would happily recommend.

Posted 1 week ago

Nikki

Received advice re employment law. Chris was very helpful and advised accordingly. Would happily recommend them and if ever I need help again, will not think twice before using them.

Posted 2 weeks ago

Samantha K

Absolutely brilliant thank you. Caroline Lewis is a legend

Posted 2 months ago

Anonymous

The legal advice was clear and helpful.

Posted 2 months ago

Davinder P

Good Service

Posted 2 months ago

Adrian V

I was using Redmans services for a Settlement Agreement. Very quick and professional service. The outcome was favourable and I was very pleased with the amendments and results. Pretty glad to recommend them for any type of legal advice.

Posted 2 months ago

Anonymous

Very responsive, efficient, clear and supportive. Thank you! Highly recommend.

Posted 2 months ago

Tiago S

Chris was always prompt to help me with legal matters that are beyond my comprehension and very helpful leasing with my former employer. I would recommend Redmans Solicitors to everyone who needs help.

Posted 2 months ago

Anonymous

Fast and professional advice tailored to what was needed. Thanks for your help Chris Hadrill and team.

Posted 2 months ago

Peter S

Really pleased with the outcome and the advice I had from Chris and Sacha.

Posted 2 months ago

Harika A

Redmans solicitor's helped me with my settlement agreement, Chris has been very helpful throughout the process.He was very prompt in his responses and made my settlement look simple.Special thanks to Caroline for her efficient communication, thorough explaination of contract terminology and negotiations.I highly reccommend Redmans solicitors for anyone seeking employment related legal help.

Posted 2 months ago

Anonymous

Good and quick service

Posted 2 months ago

Ricky D

Very satisfying to be assured of such attention and professionalism.

Posted 2 months ago

Anonymous

Excellent service - thankyou

Posted 2 months ago

Anonymous

Efficient, timely and friendly support and advice

Posted 2 months ago