If you’ve been offered a settlement agreement, you may be thinking…
“Do I have to sign this?”
If you’re happy with what you’ve been offered, and are happy to be leaving then there’s no need to read this post.
But if you feel there’s scope for getting more from your employer, then read on…..
Don’t get pressurized into agreeing……
You’ve mostly likely been invited to a meeting “out of the blue” and presented with the financial terms of the agreement. You’ve probably been told they want an answer now (or in a very short period) or they will withdraw the offer and will then have no choice but to start a ‘formal process’.
It may not seem it, but the ball is in your court. If they wanted to go down the ‘formal’ route they could have done so, ….. they don’t really want to. They want you to agree to the offer to save them the time and effort involved in a ‘formal process’ and want you out of their business ASAP (tough love but it’s a fact!).
This means there is scope for re-negotiation…. so don’t say ‘yes’ or give any indication you agree to this first offer during the meeting. Tell them you need time to think about it and to get some professional advice – and you will get back to them when you have done so.
Don’t accept the offer is ‘non-negotiable’…..ask, they can only say ‘no’!
Your employer has probably told you the offer is ‘non-negotiable’. The fact is though, few offers are non-negotiable as it’s rarely the case that one party holds all the cards.
You need to figure out the ‘pain points’ and start picking – as a rule they normally fall into the following categories – time, money, legal risk, PR, confidentiality, competition and morale.
Once you’ve completed this exercise you’ll come to realise there’s a good chance there is room for improvement on the offer.
‘If you don’t ask, you won’t get”…..
Even if there isn’t many ‘pain points’ to run with, my philosophy is ‘if you don’t ask you won’t get’. This rings true for asking for a pay rise but that’s for another post!
Your employer has probably told you, if you don’t accept the offer they will withdraw it. Take this with a grain of salt. Whilst they can take the offer off the table at any time before it’s signed by both parties, you’ve got to ask yourself – are they really likely to do this? If they do, they will have no option than to follow the ‘formal’ process they were trying to avoid by offering you a settlement agreement in the first place. Aren’t they much more likely to just say ‘no’ and restate that the offer is final?
They want you to sign, so you just need to find the biting point – what extra money would they be willing to offer you – to get you to sign on the dotted line. The thing is, even if they say ‘no’ – no harm done as you’re no worse off for asking!
Take a few days and get the advice you need…..
The ACAS Code of Practice on Settlement Agreements recommends employees are given at least 10 days to consider an offer. If your employer is pushing you for an answer remind them of this. HR should know this already and should have made the manager aware of these recommended timeframes.
Take this time and use it wisely, gain some insight into the reasons you’ve being offered the settlement agreement, learn the ‘pain points’ (see above) and who is instrumental in the decision and why. The more background you can give your solicitor the more arguments they’ll have in a negotiation discussion.
Get a solicitor on board early so you, and they, have time to prepare – ask them to set out your options, the risks and the costs – and agree a strategy.
Get your paperwork in order, contracts, performance appraisals, important emails & letters, company policies – these documents may be useful to your solicitor when negotiating on your behalf.
Invest for reward…..
Your employer will offer to pay a ‘contribution’ towards your legal fees for ‘advice on the terms and effect’ of the Settlement Agreement as presented. The contribution normally equates to around 1.5hrs of your solicitor’s time. That’s barely enough time to read the settlement agreement, your contract and have a discussion with you about the terms, actually providing the advice and certifying the agreement (the basic legal requirement).
What you may not know is that your employer keeps the contribution low so you don’t get any more advice than what is legally necessary to sign off on the agreement. And why would they pay more?
However, if you want to get more, you need to invest in more of your solicitor’s time, it’s a simple as that. Buy an extra hour or two and you could get back 5x, 10x, or even 20x your return. 99% of my clients get much more than their initial ‘non-negotiable’ offer!
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If you’ve received a settlement agreement ‘out of the blue’, you’ll need to make sure you receive legal advice on it.
I advise clients throughout the UK.