What do I do if I am offered a settlement agreement? Employment Law
- Get good legal advice. Without independent legal advice, the agreement will not actually be binding. Very often your employer will pay all or some of your legal costs, so remember to ask them whether they will pay your legal fees.
- Work out your finances. Normally the first £30,000 is tax free but payment in lieu of notice and notice pay generally is subject to usual deductions. This can’t now be fudged. Employers are required to tax as earnings the part of a termination payment that is equivalent to the earnings you would have received had your notice period been worked in full.
- Be discrete and don’t tell everyone about the agreement. It is usually a term of the agreement that no party will discuss that it even exists, let alone the terms themselves.
- Don’t panic! You may feel shocked, upset and worried as you turn your mind to losing your income and searching for another job, but try not to panic. Get the support of a qualified employment solicitor to ensure you get good advice and the help you need to negotiate the best possible deal.
The important thing to remember if you are offered a settlement agreement is that this is a legal document and by signing it you are foregoing any right to bring legal action against your employer.
So if you do believe you have a claim of any sort against your employer, think very hard before you sign the agreement and seek legal advice as there is no going back.