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In the last year many businesses have struggled to cope with turbulent economic conditions and a rapidly-changing legal and economic environment. One option for dealing with these circumstances is downsizing your workforce or restructuring your business. If you’re looking to make a number of employees redundant then you may wish to consider settlement agreements for your employees: they’re an efficient, clear and amicable way of terminating the employment relationship with an employee, and in return you will have the certainty that the relevant employees will be waiving their right to bring employment-related claims against you.

We have provided below our top tips for employers on how to deal with a group settlement agreement process

Why do I need to get my employees to take independent legal advice on their settlement agreements?

If you’re undertaking a group redundancy exercise (or dismissing a group of employees for any other reason) then you may wish to consider offering the relevant employees a settlement agreement. If you’re offering employees settlement agreements then you will need to make sure that the employees are receiving independent legal advice (in addition to other requirements) to ensure that the settlement agreements are valid.

If you’re seeking more information on a settlement agreement then you can consult our guide on settlement agreements or the ACAS Code of Practice on Settlement Agreements.

Do I need to cover the cost of my employees receiving advice on their settlement agreements?

It is not legally required but it is usual for the employer to make a contribution to the employee’s legal fees, since one of the statutory conditions for a settlement agreement is that the employee has received legal advice. The going rate may vary depending on locality and complexity, although most are approx. £500 plus VAT.

What approach should I follow if a number of employees in my business are receiving settlement agreements?

If a number of employees (usually five or more) are seeking advice from an independent legal adviser on their settlement agreements then we would normally recommend running a group exercise to deal with the settlement agreements.

Our employment law team has a huge amount of experience dealing with settlement agreements, providing independent legal advice to both employers and employees. We have managed a number of large volume settlement agreement exercises in time-critical situations and we have a record of dealing with settlement agreements professionally and expediently.

If you’re undertaking a settlement agreement group exercise then we would recommend undertaking the following steps to make the process as painless and efficient as possible:

  1. Digitise the process: use emails, word documents and pdfs to distribute documents electronically – doing this will reduce the amount of time that it will take to complete the process and will allow a clear audit process as to which documents were sent and when
  2. Use electronic signatures: using electronic signatures has a number of advantages: it makes the process of completing the settlement agreement much swifter, allows for an audit trail of the agreement, and generally allows the settlement agreement to be completed the same day as the terms are agreed
  3. Set timeframes for the work being done: be clear about your expectations as to when employees should take advice and send their settlement agreements back. As with any project management exercise its a good idea to set clear guidelines as to what work has to be done and when
  4. Agree a template settlement agreement: agree a template of the settlement agreement internally and pre-approve what standard amendments can (and can’t) be made to the agreement – this will avoid disparities in the completed settlement agreements and allow your team to have a clear understanding of what amendments might be allowed and what won’t
  5. Give your employees a reasonable amount of time to receive advice on the agreement: under the ACAS Code of Practice on Settlement Agreements employees should have up to ten working days to receive legal advice on their settlement agreements – it’s normally good practice to follow these guidelines (even if they’re not legally binding) to avoid an argument at a later date that the settlement agreements are not binding
  6. Provide breakdowns of terms to the employee and their solicitor: be clear from the start on what is being offered and why – this will save time on clarifying points in the future
  7. Be firm on legal fees: be clear on how much is being offered in terms of legal fee coverage to the employees – this will set clear expectations for each employee on what their relevant budget is, and will avoid an escalation in the budget set for dealing with the settlement agreement process
  8. Use telephone conferences and online meetings: use telephone conferences and virtual meetings (as well as email communications) to ensure that regular updates are given and received on each settlement agreement
  9. Prepare in advance: as in any legal exercise, planning and preparation are key to achieving a desired outcome. The more work that you can do in advance, the fewer problems you will experience in the process – fail to prepare, prepare to fail

Our specialist team of employment law solicitors can help you deal with your settlement agreement issues. If you’re preparing to go through a group settlement agreement exercise then call one of our legal advisers in order to ensure that your employees are getting the independent legal advice on their settlement agreements. We can also help you with drafting the template settlement agreement to use for your employees. Just call us on 020 3397 3601 or use our enquiry form and we’ll call you back.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

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    Testimonials

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    269 Reviews

    Sue W

    The people at Redmans talk to you with respect and make you feel like they take your situation personal. They clearly care and are extremely professional. I have recommended Redmans to many people.

    Posted 4 days ago

    Anonymous

    Redmans Solicitors were consistently prompt, efficient and professional from the start of my reaching out to them for support in relation to contentious negotiations of an employment matter that continued for almost two months resulting in a positive settlement agreement. Chris Hadrill was diligent, thorough, empathetic and objective in his advice and guidance, showing deep and broad knowledge of the law and legal processes plus extensive practical experience in handling complex matters, resulting in clear and pragmatic advice in ambiguous circumstances that resulted in a very good outcome. I fully recommend Chris Hadrill and Redmans Solicitors! I have made this review anonymous purely because of the confidentiality obligations in the settlement agreement concluded.

    Posted 1 month ago

    Michelle W

    Redmans solicitors provided legal support and advice for a settlement agreement. Excellent customer service, very professional. The senior associate solicitor kept me updated throughout the process, showed empathy and the agreement was signed-off / completed within the agreed timeline.

    Posted 1 month ago

    Mark W

    Redmans Solicitors were extremely professional and helpful! Chris Hadrill handled my case and was an amazing help! His guidance, advice and understanding to my redundancy settlement were always clear, concise and very helpful and I am very grateful to him, and glad I found Redmans to help with my settlement. I highly recommend them!

    Posted 1 month ago

    Alison M

    Very happy with the advice I received

    Posted 1 month ago

    Margaret A

    I found everything about the company to be extremely professional and efficient. During my initial contact with Chris, he listened well and was reassuring, so I felt confident that my case would be well handled. Caroline was excellent at explaining all the legal points and answering my questions, as well as being very supportive and understanding throughout the process. I would definitely recommend this company.

    Posted 1 month ago

    Sanja K

    Very efficient and professional service.

    Posted 1 month ago

    Anonymous

    I found the advice I was given by Redmans Solicitors to be clear and useful and found the solicitor on my case to be both knowledgeable and approachable.

    Posted 1 month ago

    Karen T

    Great service. Thank you.

    Posted 1 month ago

    Anonymous

    Excellent service from Chris & Mel Chin. The best outcome was achieved from the redundancy process. They were extremely thorough, listened carefully and acted swiftly on my behalf. I highly recommend Redmans Solicitors

    Posted 1 month ago

    Shanine M

    Excellent service, thank you so much!

    Posted 1 month ago

    Anonymous

    I found Caroline and Chris very Helpful and provided excellent service. Caroline especially provided great legal advice and made me feel at ease with the whole process. I would highly recommend them. Thank you!

    Posted 1 month ago

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    Posted 1 month ago

    Alex K

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    Posted 1 month ago

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    Posted 1 month ago

    Dominica S

    Caroline & Chris were very prompt and efficient.Very happy with the service and will definitely recommend Redmans Solicitor to everyone !

    Posted 1 month ago

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    If you are looking for a group of solicitors who are Professional, Caring and on point, then look no futher than Redmans. I was literally hand held through out my case. Can not find fault with this company, very happy with the result and the service i received. Would highly recommend Redmans.

    Posted 1 month ago

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    Posted 1 month ago

    ALISDAIR L

    Redmans did a brilliant job regarding my redundancy agreement. I miss read an extra charge which wasnt the case so doing a new review to clarify. I would recommend Redmans for any employment law issues you may have.

    Posted 2 months ago

    Christos G

    Great legal advice and quick correspondence. Very supportive and helpful through the entire process. Thank you Redmans!

    Posted 2 months ago

    Anonymous

    Chris Hadrill advised me on a redundancy settlement agreement. He was very responsive, easy to deal with and gave me good advice at a stressful time.

    Posted 2 months ago