Top Tips For Settlement Agreement Negotiations

Posted on 18/03/2021 under redundancy, Uncategorized,

An HR manager was once quoted as saying – “Whenever we get someone cheap, we think how lucky we are”.  This statement makes two things clear:

1. In any negotiations, be they at the start of employment, during pay rise considerations, or in a Settlement Agreement, chances are that you are being offered the minimum your employer believes they can get away with, and
2. Your employer expects you to negotiate better terms/salary/financial settlement.

If you have been offered a Settlement Agreement by your employer, there are several things you can do to strengthen your bargaining position and achieve more favourable terms.

Instruct an experienced Settlement Agreement Solicitor

The first and most important step you can take to successfully negotiate a Settlement Agreement is to instruct a Settlement Agreement Solicitor.  Legally, you must seek independent advice from a Solicitor before signing a Settlement Agreement.  Your Settlement Agreement lawyer will carefully look over the terms of the agreement and evaluate the strengths and weaknesses of you and your employer’s position.  Because of there experience in negotiating Settlement Agreements related to many industries and professions, they will have the knowledge required to negotiate the best terms on your behalf.

Do not worry about legal fees, these will be covered by your employer.

Do not resign

Being involved in a dispute with your employer is one of life’s most stressful events.  It can be tempting to resign to get away from your job and your employer to protect your mental health.  However, there are a few reasons why resigning is a bad idea:

• You are unlikely to get as generous a financial settlement through making an unfair/constructive dismissal claim as you would if you negotiate a Settlement Agreement. And although you can negotiate redundancy agreements, the compensation amount is also likely to be less than what you would achieve with a Settlement Agreement.
• For your employer, the main advantage of a Settlement Agreement is avoiding an Employment Tribunal claim. Leaving your job before signing an agreement removes much of the need for the employer to be generous, or even reasonable. 
• The compensation element of a Settlement Agreement is designed to ensure you have enough money to live on whilst you are looking for a new position. If you already have a job to go to, the need for compensation is removed.
• Bringing a claim in the Employment Tribunal can damage your professional reputation and cause future prospective employers to be reluctant to hire you. Settlement Agreements usually contain a confidentiality clause which protects both you and your employer.  Furthermore, as part of negotiations, you can ask your employer to provide a positive reference.

Understand your employer’s WFIM

In any negotiation, it is vital to understand the other sides ‘What’s In It For Me’? (WIFM).  Normally an employer will offer a Settlement Agreement because they want to swiftly end their employment relationship with you and avoid the cost, time, and potential reputational damage that may occur if you bring a claim in the Employment Tribunal.  Agreeing to a confidentiality clause and ensuring the transition period between you and your successor’s employment runs smoothly, are just two ways you can increase your negotiating position.  A Settlement Agreement Solicitor will quickly establish what is important to your employer and negotiate a win/win solution.

If your employer is dragging their heels, consider raising a formal grievance

Unfortunately, your employer will be more motivated to get rid of a ‘problem’ than reward you for many years of exceptional work.  If you need to encourage your employer to the negotiating table, raising a formal grievance may result in them fast-tracking a Settlement Agreement, which is quicker and less stressful to generate than the grievance process. 

Raising a formal grievance also allows you to test the strengths and weaknesses of your employer’s stance, providing the information you and your Settlement Agreement lawyer can use to bolster your negotiating position.

Concluding comments

A good Settlement Agreement is one that provides you with enough compensation to comfortably live until you secure another job and protects your professional reputation.  By working with a specialist Settlement Agreement Solicitor, you will greatly increase your chances of negotiating terms that best protect your interests.

Have more questions about settlement agreements and redundancy? Call Settlement Agreement Solicitors today on 0800 048 5667 or fill in your details below to request a callback.