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Negotiating a successful settlement agreement


If hearing you are going to be made redundant is not stressful enough, you need to negotiate a settlement agreement on top of it. A settlement agreement is a legally binding document between an employer and employee. In its simplest form, the agreement provides that the employer pays the employee a sum of money in exchange for the employee agreeing not to take a claim to the tribunal. In reality they are a bit more complicated than that and an employee can use their bargaining power to increase the sum the employer will pay to them. 

Do not resign

This is the most important part of negotiating your settlement agreement. You will be aware at this point that your employer does not want to keep you in your position, however it is important to stay there until these negotiations are sorted out. From the employer’s perspective you lose your bargaining power the moment you leave the company. Why should they pay when you have already decided to leave?

Stay calm

These discussions may be uncomfortable and redundancy is an emotional time for an employee. However, you must make sure you remain calm and don’t fly off the handle at your employer. This will only give them more bargaining power and weaken your own position. Also, be careful if you are making threats to take your employer to the Employment Tribunal. These types of threats should only be made subtly in your without prejudice conversations. If you are seen to threaten your employer in open conversations this could be seen by a Tribunal as breaching the relationship of trust and confidence between you. 

Don’t be too nice

By forcing you out of your job and making you unemployed your employer is the one that is treating you badly. There is no need to be outright nasty and throw personal attacks at your employer, but there is also no harm in playing hard ball. In fact, it is necessary for negotiating the agreement. Your employer does not want to pay you to leave and they will try to get away with paying you as little as they possibly can. To even get a decent agreement, let alone a fair agreement, you will need to push back a little bit and assert your bargaining power.

Sweeten the deal

Offer your employer something in return. Perhaps you can offer a confidentially clause, or a smooth handover to the person taking over your responsibilities. Either way offering your employer something that they want can be a great way to get your settlement amount increased. This way you get more money and the employer gets something else they want in return. Everyone wins.

Get legal advice

Employers do not like dealing with lawyers. It shows that you are serious about enforcing your rights against your employer, and subtly increases the threat that the issue will go to an Employment Tribunal. Your lawyer will be able to champion your position and make sure you are not signing something that is not fair and reasonable to you. 

Additionally, these agreements often come with difficult small print. A lawyer will know what to look out for and will be able to guide you through the small print. 

Call our experienced settlement agreement solicitors in Manchester 0161 820 8888 or call 0208 889 8888 for our solicitors in London. We will happily provide a free 30-minute consultation on your matter. Give us a call today!


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