Employees turning to settlement
agreements to escape unhappy workplaces
THEY'RE traditionally offered by
employers as a way of suggesting that an employee moves on without fear of
reprisals. But there's nothing to stop employees, rather than their bosses,
making the first move when it comes to suggesting settlement agreements,
according to an employment law solicitor who works on both sides of the fence.
Lindsey Knowles from Kirwans law firm is at the forefront of driving a change in
the way that settlement agreements are being used, and said that a number of
employees who have grievances at work could benefit from using a settlement
agreement to fast-track themselves out of unhappy employment.
Lindsey said:- "Settlement agreements can provide a good option for
employees who are still in employment but are concerned about work; maybe
because of bullying, discrimination claims or other grievances, or they
themselves may be facing disciplinary action.
If they no longer want to work for the employer but would rather not resign and
walk away with nothing, bring a constructive dismissal claim or even face the
risk of dismissal, then putting forward a settlement agreement could be a good
Offering an employer a settlement agreement involves writing a 'without
prejudice' letter, setting out the issues which the employee has and
suggesting the potential to negotiate a termination of the person's employment
under a settlement agreement."
Settlement agreements came into force in 29 July 2013, as part of a number of
measures to improve employment legislation. Previously known as compromise
agreements, these legally binding written contracts record an employee's
agreement not to pursue legal action against their employer over anything set
out in the agreement.
Not all employment claims can be waived; claims for statutory maternity,
paternity or adoption pay, for example, cannot be covered by settlement
agreements. The specific claims they apply to must be set out, and the other
legal requirements to be a valid settlement agreement must be followed.
Lindsey said:- "Obviously there is no guarantee that the employer will
enter into negotiations, but it does open the door to discussions about how to
end what can often be a difficult situation for both parties."
Things to consider if you want to suggest a settlement
1) Suggesting a settlement agreement is likely to end any relationship you have
with your employer, so be sure that you're ready to leave before revealing your
2) Make sure you seek legal advice before discussing any settlement agreement
with your boss, as there are specific ways that it should be done depending on
your current relationship. If there is already a dispute, for example if you
have already raised a grievance or if disciplinary action or performance
management has been initiated, then any letter should be titled as
'without prejudice and subject to contract,' and conversations should be
requested in advance as being protected and on a 'without prejudice'
means that details of the letter or conversation cannot be used against you in
any subsequent court case or employment tribunal.
3) Where there is not already a dispute, but you are simply unhappy in a
situation, then you could request a 'protected conversation,'
which enables parties to have 'off the record' discussions. Be aware, however,
that if you were to go on to bring a claim for anything other than a standard
unfair dismissal or constructive dismissal, your employer could, in trying to
defend the claim, legally refer to the discussions which took place during any
4) Be clear on why you are proposing a settlement agreement and how your
employer might benefit from agreeing to it.
5) If you're not yet sure which legal option to present to your employer, then
protect your right to press ahead with a constructive dismissal claim by sending
a letter to them stating that your continued employment remains 'under protest.'
Be aware, however, that working in this way should be seen as an extremely
short term solution, and that any constructive dismissal claim should be brought
as soon as possible after an alleged breach of contract by your employer;
6) Don't suggest an actual figure in your 1st approach. Instead, wait to see
what your employer is prepared to offer.
7) Settlement agreements don't just involve financial settlements; you can
negotiate about references, restrictive covenants and notifications, so think
carefully about what you'll need going forward.