Settlement Agreements – ACAS Advice

It was back in 2013 when ACAS first published their guide to Settlement Agreements, it’s full of great information and advice for employees and employers, it’s particularly useful in providing a degree of protection for both parties where they have discussions around a possible termination of employment.

The guide outlines some recommended rules of engagement between both parties, and importantly what constitutes “improver behaviour” (in fact the guide has a good list of things they class as improper behaviour including ‘undue pressure’, ‘discrimination’ etc.).

Some of the advice covers areas that to allow the process to be seen as fair, some of the highlights include:

  • Allowing a reasonable amount of time to consider the offer – (10 calendar days).
  • Employers should consider extending this period if the employee is disabled (for example)
  • Employers asking for shorter periods could be seen as giving undue pressure to the employee
  • Employers can’t say before any disciplinary process has started that the employee will be dismissed if the Settlement Agreement isn’t accepted
  • The employer can explain in a neutral language why the Settlement Agreement is being offered – and the guide does say that it would be helpful if the employee states clearly why the offer is been made.
  • The employee can provide factual outcomes if an agreement isn’t reached
  • Employees can’t threaten employers (unless Whistleblowing conditions are met)
  • It is not ‘improper’ not to offer a reference
  • Employers could consider how a Settlement Agreement being received out of the blue might be greeted by employees
  • Employers should review their Settlement Agreements and related processes on a regular basis

Here we are just scraping the surface of the advice that ACAS provide, but it is worth everyone involved in these processes downloading and reading the Settlement Agreement guide.


​Settlement Agreement – time to consider

I just wanted to publish this quick post because I’ve had the same question pop up twice this week.

My clients were obviously concerned that they had been offered a Settlement Agreement out of the blue and they didn’t know if they had a timescale in which to agree them.

In clarification, if you are you are provided with a Settlement Agreement by your employer then you should ask them for a fair amount of time to consider your options, the ACAS (Advisory, Conciliation and Arbitration Service) Code of Practice suggests a minimum of 10 working days.

This period of time will allow you to discuss the agreement with a solicitor and allow them to assist you in a) understanding the agreement and b) discover whether or not the settlement if fair.

Your solicitor may also be able to negotiate your settlement to try and improve the amount payable.

​Settlement Agreement – Benefits

Settlement Agreements are great for both parties, the main benefits of entering into a Settlement Agreement is that it provides a good level of certainty and understanding between both parties (employer and employee).

For the employer, they get protection in that their ex-employer will not bring legal action against them in the Employer Tribunal by having their employment rights waived.

From an employee perspective the settlement agreement will confirm the value of the payment that their employee will make. This will generally be higher than any salary you would be paid as they would like to urge you to sign and move on). It will also include details about any reference and a pledge that the termination is completely amicable.

Once it’s been signed by both parties and your advisor has provided a certificate the agreement becomes legally binding.

Settlement Agreement Calculator

You’ve found this post because you’re interested in calculating what your settlement agreement should be, the problem is, no online calculator can accurately provide that information.

All they do is provide you with a rough estimate of your worth by operating on some very simple assumptions, and in fact when I’ve tested some of these settlement agreement calculators they tend to be vastly incorrect. I think you’re worth more than a guestimate.

I take the time to understand clients as an individual, their contract, conduct at work and any claim that they believe that they may have against their employer (to name just a few), then look at that against what they have been offered; then together we can decide whether the settlement agreement is fair or we need to negotiate an improved offer.

So if you have a settlement agreement, you really need to speak to a solicitor to get an accurate idea of what offer should be in your agreement.

Get in touch with me today for a free, no obligation chat.

Settlement Agreements – Some Practical Advice

Don’t worry, see the event as a fresh start

I appreciate that losing a job is a stressful time, but with a settlement agreement remember you leave your employment on no worse than neutral terms and with the financial settlement, the injection of money could be attractive.

Seek advice from a solicitor as soon as possible

You should have been told by your employer that you need to seek the advice of a solicitor and that they will pay for it (find out how much this sum is as soon as you can).

Contact a solicitor as soon as possible to explain the situation to see whether your agreement seems acceptable. As you leave the company you want to ensure that you exit with the best terms possible. The first thing I do is see whether the financial settlement is better than the law says an employee is entitled to – if an employer wants you to sign away your rights to raise an employment claim then they should be willing to pay extra for the security.

Don’t try to negotiate yourself

By law if you start the negotiation then your employer can take this as a sign that you have rejected their offer – this can be dangerous in some situations, you really need to get your solicitor deal with negotiations on your behalf.

Speak to your personnel department

Some larger businesses may have resources available to outgoing staff to help them with finding new work. Some may have an agreement with third party employment consultancies that specialise in helping employees with finding work. This alone can be worth an additional £200 to £300 per month if you were to retain these services privately.

Don’t sit and wait

Whatever financial settlement you end up with it may not last you as long as you think, so it’s worth looking for a role job as soon as possible, try sites like totaljobs, monster and indeed to see what roles are available to you.

Good Luck

With me by your side you do not need to go through this process on your own, I will be there with advice and assistance to help you get through this difficult time with the least amount of stress possible.