Same Day Settlement Agreement Solicitor in London/Manchester/Birmingham
Last Updated: May, 2024. Originally Published: June 29, 2016
I’m a specialist Settlement Agreement Solicitor with over 30 years’ experience. I offer a ‘fixed fee’ service which is the amount your employer has agreed to contribute. Your employer pays me at the end direct.
You can read my standard Settlement Agreement terms here. The fee service covers advice on the agreement and reasonable negotiations but not disputes or complex negotiations. If you’re a long way apart you can find a litigator via The Law Society’s excellent ‘Find a Solicitor’ search engine:
https://solicitors.lawsociety.org.uk/
Over the years I’ve advised on thousands of Settlement Agreements so I can get to the point very quickly, focusing on what you hope to achieve without damaging relations with your employer or making things more stressful.
This note should help you understand the basics.
What do I need from you?
I need:
A copy of your Settlement Agreement
Your mobile number
The HR manager’s name and email
Your contract of employment (if relevant)
I don’t need a copy of your passport/driving licence because I don’t hold any client money.
Your employer will pay any monies due to you direct.
Try me first on my mobile 07527 261926 or leave a message at: 0207 247 7190.
What is a Settlement Agreement?
Settlement Agreements are a contract designed to bring employment to an end amicably. Once signed you can’t bring any claims to an Employment Tribunal.
The terms are mainly common sense: for an enhanced payment you give up the right to bring claims. There are protections for your employer: property, unfair competition, reputations, confidentiality etc. and for you: a reference, announcements, confidentiality etc.
The big issues
Settlement Agreements tend to be attractive on the ‘pain to gain’ test.
Of course, you don’t have to sign. If you have potential claims, I can discuss them with you and give a broad indication of whether they are worth pursuing in light of the offer on the table.
But do bear in mind that with employment law disputes there’s a lot more at stake than just money. Most importantly, you have a career to think about.
Some guiding principles:
- Where do you want to be next?
- What will you take home under the Agreement compared to a tribunal award?
- If you are considering a legal claim what facts are you relying on? (dates/events/documents etc.) Typical claims are unfair dismissal, discrimination & whistleblowing
- How can you prove what happened? What evidence do you have?
- If you can find another job fairly quickly there really is no point in a legal claim because any compensation will be low
Remember most claims need 2 years’ continuous employment (not discrimination or whistleblowing) and events need to be recent especially with a constructive dismissal (where an employee resigns in response to breaches by an employer).
Advantages of a Settlement Agreement
A Settlement Agreement is normally better than a dispute because:
- No legal fees - if you use a lawyer these will be deducted from any award or settlement by anything up to 33%
- Tax efficiency - compensation payments are tax free to £30,000
- Reputation – the Agreement will include an agreed reference and protection from negative comments
- Looking for work - disputes may well put off future employers
- Litigation risk - there’s a risk you might lose
- Stress - tribunals are famously stressful …it can take over a year to get to a tribunal hearing and dealing with former colleagues as adversaries is particularly unpleasant
What’s in a Settlement Agreement?
Settlement Agreements normally deal with the following:
- Notice- your employer must give you notice to end the contract. The amount is either confirmed in your contract or fixed by law (no less than 1 week’s pay for each year worked to a maximum of 12) Notice can either be worked, served on ‘garden leave’ or paid in lieu (go straightaway, paid ‘up front’). Notice is paid net of tax. There are no exceptions to this.
- Termination payment- the amount of compensation. Sometimes this is referred to as an ‘ex gratia’ payment
- Employee warranties- promises made by the employee such as being a ‘good leaver’ and that you don’t have a job to go to at the date of signing
- Confidentiality/Business Protection- the employer may want to protect its business interests. These protections have to be reasonable and normally no more than 6 months after leaving. They are often already in your contract of employment
- Benefits - healthcare, pension contributions, car allowance etc. Sometimes these can be continued for a period of the end date.
- Handover and practical steps- returning property, passwords, deleting employer work from personal devices
- Tax indemnity- your employer won’t guarantee the tax- free status of any payment so if HMRC take a different view, you’ll have to pay the outstanding tax. Generally, any compensation (but not pay) is tax free to £30,000. Employees sometimes ask for amounts over £30,000 to be paid direct into their pension. Subject to the rules of the pension provider this can be up to £40,000.
Is the amount I’ve been offered fair?
Your Agreement may refer to the basic entitlements at tribunal.
These are:
Basic Award/Redundancy payment
This is calculated by reference to a week’s pay which is fixed at an upper amount. As of April 24, a week’s pay for these purposes is:
- £700 for each year worked under 41
- £1050 for each year worked over 41
This award is capped at a maximum 20 weeks’ pay. The Basic/Redundancy Award is not taxable so is often included in the compensation payment.
If you are being paid a Redundancy payment this is the same amount as the Basic Award so you wouldn’t get this twice.
Notice
Notice is either set out in your contract of employment or statutory minimum of 1 week’s pay for each year worked up to a maximum of 12 weeks. Tax and NI will be deducted as HMRC treat this as pay. Ther are no exceptions to this rule.
Compensation/Unfair Dismissal
This is mainly made of lost earnings, capped at 1 year’s pay, upper limit £115,115 (except with discrimination and reporting legal failures (aka ‘whistleblowing’)). To negotiate on this, you’ll need solid evidence of real difficulties you will face finding a job in a similar role (eg: emails from recruiters, press reports on the job market in your sector or medical evidence). A secretary for example could probably find a job in 1 month but someone in a bespoke role may face genuine hurdles, as would someone who has been made very ill by the employer or whose reputation has been damaged by false misconduct allegations.
The Compensatory award can be reduced to reflect the fact that you would have been dismissed in any event. A common example would be an unfair dismissal when this is followed by redundancies. Compensation might only be to the date you would have been made redundant.
Discrimination and ‘whistleblowing’ cases
In these cases, there is no upper limit on compensation for lost earnings and you can also claim compensation for ‘injury to feelings.’ You don’t need to have worked for 2 years.
Guidance is set out on each of the bands for these awards (named after the Vento case).
In respect of claims presented on or after 6 April 2024 this is the guidance:
- Lower band of £1,200 to £11,700 for less serious cases
(typically a one-off/isolated instance of discrimination)
- Middle band of £11,700 to £35,200 for cases that do not merit an award in the upper-band/more serious cases that do not merit an award in the highest band.
- Upper band of £35,200 to £58,700 for the most serious cases;
Exceptional cases are capable of exceeding £58,700. This would normally involve sustained and malicious unlawful conduct.
Examples include fictitious disciplinary procedures, collusion or a sustained discriminatory campaign over many months and leading to diagnosed stress.
Pension contributions
Payments made direct into pension schemes are separate from the £30,000 tax free exemption and not normally subject to tax though there are limits to the annual and lifetime allowances for contributions which you need to check with the pension provider. Where compensation is over £30,000 employees sometimes ask for some of it to be allocated as a tax efficient employer pension contribution.
Independent advice should be sought from a qualified accountant or pension adviser.
What happens if an Agreement isn’t reached?
You may want to bring a claim. This must be done promptly and no later than 3 months of the termination date beginning with the ACAS process followed by a tribunal claim. These dates are strict so always take legal advice.
Contact Gordon - Settlement Agreement Solicitor in London
To contact a specialist Settlement Agreement Solicitor please complete my online contact form, call my mobile 07527 261 926 or the following landlines:
London: 02072477190 | Manchester: 0161 883 1255
Birmingham: 0121 663 1191
Very professional service in reviewing a settlement agreement quickly and efficiently. - Gary S.
