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Employment Law: Settlement Agreements Q&A (Part 2)

View profile for Sally Morris
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Q: Can I be accompanied to a meeting with my employer?

There is no legal right for employees/workers to be accompanied during meetings to discuss or negotiate a proposed termination of employment and Settlement Agreement with their employer.

However the Acas Code suggests employers should allow this as the presence of another person may create an air of formality but it might make it harder to have frank conversations. In some circumstances, it may be reasonable to allow an individual to be accompanied, such as those who are disabled, so that the employer is not applying any undue pressure on the individual.

Q: What are the steps in pre-termination negotiations?

Employers need to assess when it is appropriate to open settlement negotiations and have a clear basis for making an approach to an employee/worker.

The first step is to be invited to a meeting at a mutually convenient time and place. At the meeting, the employer explains its concerns and proposes an exit with an agreed settlement package.

If the individual agrees to explore the suggestion of settlement, the employer produces the draft terms in a written Settlement Agreement. The employee must then have a reasonable period in which to consider the formal written terms and to obtain independent legal advice.

If the individual is not interested in exploring settlement, the employer should cease settlement negotiations and seek to tackle the underlying problem.

Q: Can my employer force me to sign a Settlement Agreement as soon as possible?

There is little in the way of practical guidance on how employers should initiate and conduct Settlement Agreement negotiations. However, the Acas Code states that parties should be given a reasonable period of time to consider the proposed Settlement Agreement. As a general rule, 10 calendar days should be allowed to consider the proposed formal written terms of a Settlement Agreement and to receive independent legal advice.

The Acas Code is not intended to set down concrete rules and therefore whether an employer has been reasonably will be a question for an Employment Tribunal to decide on the relevant facts.

Q: Does the employer pay for the legal costs?

It is usual for the employer to make a contribution to the employee’s legal costs. However there is no statutory obligation on the employer to pay. The going rate varies depending on the locality and the seniority of the employee, but generally costs are approximately £350-£500 plus VAT.

The employer’s contributions towards legal fees do not normally extend to negotiating amendments to the Settlement Agreement. However, if there are a number of changes a solicitor recommends to the document, there is usually an approach to the Company to seek an increase in its contribution.