Let’s imagine you’ve been called into a meeting with your boss and they offer you a settlement agreement – that is, an amount of money in return for you leaving the business or dropping your complaint against them. (Note that settlement agreements are known as compromise agreements in Northern Ireland.) 
Here are some of the things you should NOT do and why.
Don’t rush
You might feel under pressure to accept their first offer straight away. It might be tempting – but we don’t recommend you do this.
It’s perfectly acceptable to ask for a few days so you can think about it.
This is normal practice, and gives you enough time to take legal advice and prepare your counter-offer. As part of your preparations, you’ll need to work out the best deal you might reasonably expect to receive, and the least you would settle for.
A reasonable amount of time to request is about ten days (although that time period is not formalised in law).
Don’t be too one-sided
A common mistake employees make is to ignore the employer’s point of view.
You need to consider the reasons why your employer should improve their offer, and think of some incentives that might persuade them to do so.
For example, you might agree not to take them to the employment tribunal, or to keep the deal secret, or to stay on for a period of time to handover smoothly to your successor.
A specialist solicitor (like us, for example), knows all the things you can offer that will help you negotiate a better deal.
Don’t just focus on the money
You might be tempted to focus on the bottom line. The maximum amount of money you can get out of your employer.
But there’s more to a settlement agreement than the cash. You can negotiate for various other things you might want, such as:
• A good reference to help you find work in future
• No restrictions on whether you can get a job with a competitor
• Support to help you write your CV, prepare for interviews and find another job
• Keeping your company mobile phone and/or company car (at least for a while)
• Agreeing what your colleagues will be told about you
Things like this could be of high value to you, but low cost to your employer. Because they might be easier for them to give you than more money, you’d be more likely to get what you want.
Don’t lose your temper
Losing your job, or arguing about discrimination (for example), can be very emotive subjects. After all, it’s your livelihood we’re talking about here. But, in any negotiation, it’s wise to keep your emotions under control.
This is because both parties really want to maintain good communications, if possible.
There’s another benefit too, especially if your employer is a small business, because you might be able to draw on their emotions by referring to the goodwill built up while you worked there.
If they have no choice but to make you redundant, you might be able to negotiate a better settlement agreement by stressing the contribution you made to the business, what sacrifices you’ve made to support them in the past, and how difficult life will be for you when you leave.
It’s a delicate balance. This approach isn’t about your legal rights, it’s more about the human aspect of the deal.
Don’t negotiate alone
By law, you have to take independent legal advice before you sign any settlement agreement (don’t worry, your employer will usually pay).
However, we suggest you take legal advice early in the process, because we can help you improve the settlement agreement you’re offered in the first place. This is because you don’t know what you don’t know. You might be in this situation only once in your working life – but we deal with cases like this ALL the time.
We’ll advise how much you’re likely to be entitled to, other benefits you might get, ways to reduce any tax that might be due, and whether or not there’s a chance of bringing a tribunal claim against your employer.
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