If you are involved in an employment dispute that could end up in an Employment Tribunal, you may be able to settle the claim and enter into a settlement agreement with your employer.

Negotiation is a particular skill, and one where an experienced solicitor should add real value to your situation. All our solicitors will have been engaged in negotiation about settlement to some extent nearly every week of their career, so will know what to say, when and how. The skill we have includes not just advancing offers in the right way and at the right time, but understanding and interpreting what your employer (or its solicitor) is saying and how they are saying it. Many clues exist in negotiation communications, so having an expert like us interpret those and maximise the outcome for you is best.

This guide sets out how the process of negotiation is likely to work when the employer and employee are exploring the possibility of entering into a settlement agreement to resolve a dispute and assumes you have or are about to issue a claim.

How do I ensure I get the most I can from a settlement agreement?

When negotiating a settlement agreement, it is important to ensure that you get the most favourable terms possible. This includes getting a good financial settlement, as well as ensuring that the agreement protects your interests in terms of confidentiality, the making of non-derogatory comments and the provision of a reference.

It is usually best to advance an offer when you are on the front foot. For example, making an offer once the ET1 claim has been submitted or sent to your employer is a good time, rather than waiting until you receive your employer’s ET3 response. Perception can play a part in negotiations.

What you say will also have great influence on how your employer reacts. Say the right thing, but in the wrong way, and it could cost you.

How do I make the first move?

It is usual to specify that all communications should be treated as “without prejudice” and “subject to contract”. This means that the parties can speak freely in negotiations and anything said cannot be used in evidence if the matter does not settle and ends up in an Employment Tribunal hearing.

You can approach your employer direct or go through ACAS. ACAS can be used as a good first approach, as you can often agree with the conciliator that s/he will contact your employer without saying you have asked him/her to do so.  Any discussions via ACAS are “without prejudice”.

As we say above, making an offer when you are on the front foot is best, and may help you not appear that you are in a weak position.

What are the key points to bear in mind when negotiating a settlement agreement? 

There are a few key points to bear in mind when negotiating a settlement agreement:

• Be realistic. If you ask for too much, settlement is unlikely to happen. Employment Tribunal proceedings can be costly and stressful, so it's important to make sure that any settlement agreement is in your best interests.

• You don't have to accept the first offer from your employer. It is important to try and negotiate a better deal if you can.

• Place a value on not having to deal with the claim, not having to incur (further) legal costs, no more stress, no requirement to attend a hearing, and no risk that you might lose or be faced with an appeal. All this has a value, so you should factor these into what you are prepared to accept.

• Be prepared to walk away from the negotiations if you're not happy with the terms on offer.

• Seek legal advice before you accept, so you know whether the offer is fair and reasonable.

As we say above, if you are able to reach a settlement agreement with your employer, this can be a much quicker and less costly/stressful way of resolving an employment dispute than going through Employment Tribunal proceedings. However, it's important to make sure that you understand the terms of the agreement and get the best deal possible.

It is important to remember that experience in these areas of law is key when negotiating terms. In order to get the best settlement agreement possible, you should consider seeking expert legal advice.

Article by

Yeing-Lang Chong

0800 915 7777

Our expert employment law solicitors all have many years’ experience advising individuals who are in your position. We will be able to guide you through the process and to help you secure the best possible outcome.

We offer a range of services, so please contact our friendly customer services team to discuss further via hello@kilgannonlaw.co.uk or 0800 915 7777.

Disclaimer 

The above provides a general overview relating to constructive dismissal and is not intended nor construed as providing specific legal advice. Constructive unfair dismissal is a complicated legal claim. An individual should take legal advice from an employment lawyer if they believe their employer has behaved in such a way that entitles the employee to resign and bring a claim for constructive unfair dismissal.

This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.

28.06.2023