If you’ve been offered a settlement agreement (known as a compromise agreement in Northern Ireland), your employment is probably being terminated by redundancy or as part of disciplinary action.
It means your employer has offered you a sum of money in return for you losing your job. By signing it, you also give up your right to take them to the tribunal / court.
A settlement agreement usually includes:
- Claims to be settled
- Payments you will receive
- Tax implications
- Confidentially clause
- Reference from your employer (if any)
If you want to accept the settlement agreement, it is a legal requirement for you to take advice from a qualified professional, otherwise, the agreement will not be legally binding. Also, your employment solicitor (that’s us!) will tell you whether you’ve been offered a fair deal, and perhaps negotiate a better deal for you.
However, you don’t have to accept the settlement that your employer has offered. They might offer you more money if you sign quickly, but do not let them put you under any pressure.
If you would prefer to issue an unfair dismissal or discrimination claim against them, you can refuse to sign the agreement. To do this, you must launch your claim within three months less one day from the date you were dismissed.
Remember to take notes at any meetings you have with your employer to discuss the matter, as the details are important and it can be hard to remember everything that’s said.
These meetings are called ‘pre-termination negotiations’ or ‘protected conversations’. Usually, the content of these conversations can’t be used as part of the case. But in certain circumstances, your notes will be used as evidence. These include discrimination, whistleblowing and automatically unfair dismissal cases.
As employment lawyers, we’ve advised thousands of employees on the best action to take. We would be happy to help you too.
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