Settlement Agreements & ACAS Early Conciliation

Getting a good deal

Settlement Agreements are a fundamental part of employment law these days. Employers are very aware of the potential time, hassle and expense that dismissing an employee can create. Therefore simply agreeing a settlement with an employee to leave quickly and easily without having to follow any kind of process is a very attractive proposition.

But unfortunately there is one issue that can make things more difficult. The law requires that employees obtain independent legal advice from a Solicitor before they can sign the Settlement Agreement. Whilst, you may have agreed a deal with employee on the terms of their departure, their Solicitor may have a very different view of the deal and seek to re-negotiate it on improved terms.

Furthermore, if settlement discussions break down then you need to make sure that the process you have followed for those discussions is correct to stop them being used by the employee to bring a subsequent claim against you.

There are 5 key elements to finalising a Settlement Agreement with an employee:-

  1. Initial planning – how much to offer, tax issues and how to ‘pitch’ the proposal;
  2. Having the initial discussion with the employee that you would like them to leave and making the offer;
  3. Drawing up the Settlement Agreement;
  4. Dealing with negotiations with the employee’s Solicitor and drafting amendments;
  5. Signing off the Agreement;

ACAS Negotiations

If you have dismissed an employee without a Settlement Agreement and they are threatening to go to an Employment Tribunal then they may initiate ACAS Early Conciliation. An ACAS Officer will then contact you to see whether you would be willing to discuss a settlement.

ACAS negotiations have the benefit that they don’t require the employee to seek the advice of a Solicitor and so negotiations tend to be easier. There is also the added benefit that you or your legal representative doesn’t need to draft up a significant Settlement Agreement – the terms are generally simpler.

As with Settlement Agreement negotiations the central issue for businesses tend to be – how much to offer and what legal arguments to use in negotiations to keep the compensation bill down.

Contact

If you would like to arrange a free initial telephone consultation, please do not hesitate to contact me on 0113 871 5909, 07518 256075 or by email at andrew@lightburnlegal.co.uk.

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