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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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Absolutely brilliant thank you. Caroline Lewis is a legend

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Anonymous

The legal advice was clear and helpful.

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Davinder P

Good Service

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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.

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

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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.

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Anonymous

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

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Peter S

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

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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.

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Nemen S

Wonderful experience.Chris was very responsive and provided an excellent service. A real professional who I would recommend to anyone

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Anonymous

Their guidance was clear and they provided me with all the information I required. Friendly yet professional

Posted 2 weeks ago

Anonymous

Chris @ Redmans assisted me with an employment issue. Firstly, he was very proactive in coming back to my initial enquiry and then helped to clearly lay out the options that I had in relation to my position. He then assisted with the preparation of my case, which led to a very satisfactory outcome. I would highly recommend the quality of service & professionalism offered by Redmans Solicitors.

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Anonymous

Great service

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Anonymous

Chris was very effective and decisive in dealing with my matter. I felt guided, and the pressure to make decisions was taken off my shoulders; he knew what needed to be done and I was happy to follow his advice. The result of the legal dispute was a great success for me. He is also kind and personable. The only thing that I would say it could be improved, is the accuracy of cost estimation at the beginning: not many activites, that could not have been forseen had to take place, but costs went up more than double in the end. Overall very good and trustworthy. I would definately recommend and use Redmans services again.

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Liz P

An excellent professional service was provided by Chris Hadrill and Mel Chin. Efficient and trustworthy - would highly recommend this company.

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Redmans Solicitors were great. They were able to advice me quickly and efficiently! I would recommend them, as a good solicitors to use.

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