Do you live or work in Hampshire? Do you need some specialist advice about a settlement agreement? If so, the employment law team here at Bonallack & Bishop are here to help.
[Since 29th July 2013 this sort of document was formally re-named as a Settlement Agreement. Many people are however still using the older term, which was “compromise agreement“.]
Looking for specialist settlement agreement advice in Hampshire? Call our lawyers on ANDOVER (01264) 364433, FORDINGBRIDGE (01425) 652110 or FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached
Getting Independent Legal Advice
It is vitally important to get proper legal advice before signing your settlement agreement. Why? Because without independent legal advice, your agreement is simply not legally binding – which means that your employer is not bound to act by its terms.
To be legally binding, there are two other conditions.
- The lawyer who provided the advice must be identified within the agreement.
- Your settlement agreements must be in writing.
If you speak to the specialist compromise agreement solicitors at Bonallack & Bishop, we will make sure your financial interests are protected and that the agreement is reasonable and fair. And if not, we can advise you and if necessary negotiate with your employer to get a better deal.
Settlement agreements can often involve technical legal terms, and our employment law team will explain everything to you, making sure that your interests are represented from start to finish of the process.
Why Use Us for your Settlement Agreement?
Our team have a huge amount of experience in this area. We have advised on hundreds of settlement and compromise agreements locally and across England and Wales over the years. So give us a call today on FREEPHONE 0800 1404544 or locally on (01264) 364433.
Getting the most positive outcome from any compromise agreement means using solicitors who are experienced in this sort of work.
This is exactly the sort of work we do, so why not speak to our employment law team who can help you with your compromise agreement?
Advising on Compromise Agreements – Not Just a Rubber Stamping Exercise
We can help with any issue regarding a compromise agreement. Some of the most common aspects we advise on are:
· Giving you the right legal advice to ensure that any compromise agreement is legally binding.
· Explaining the terms of the agreement, and its implications for you.
· We can try to negotiate a better deal with your employer if you are unable to agree a settlement yourself.
· Advice on specialist compromise agreements including the Voluntary Early Release Schemes (VER) or the NHS Mutually Agreed Resignation (MARS).
· Advice about what your options are if you think your settlement is unreasonable. This includes advice about the Employment Tribunal process, if applicable.
· Internet advice – although we’re happy to see you in person, it can often be far quicker to deal with compromise agreements using phone or email.
Who will pay my legal costs?
In almost all circumstances, any employee’s legal fees for independent advice on a compromise agreement are paid for by your employer.
Do I have to see my solicitor?
It’s very important to get impartial legal advice from an experienced solicitor, but it’s not essential to meet with them face-to-face and in person unless you really want to.
Our team are accustomed to taking instruction from clients over the phone or by email. We do regular work advising on compromise agreements for clients across Hampshire. Wherever you’re based in the county, we’re here to help.
Click here to find out more about Settlement Agreements
What terms do UK settlement agreements contain?
UK settlement agreement are composed from a mixture of generic clauses (contained in most agreements) and clauses specific to your employment relationship. Listed below are some example clauses that you may find in a settlement agreement:
• An agreement on what type of reference the employer is willing to provide. An employer is under no legal obligation to provide a reference for an employee; therefore, it is important that details are provided in the agreement for any references that may be requested. Often the contract will provide only for the very basic type of reference, i.e., employment details and job description outline and therefore is a negotiation point.
• There may be a restriction in the agreement preventing the employee from seeking or starting employment elsewhere i.e., within a particular sector. This could be potentially highly restrictive on the employee and thus it is really important to seek professional legal advice if such a clause is included.
• A clause specifying how much compensation the employee shall receive under the contract. Note; a payment of up to £30’000 can be received by the employee tax free (however, if this amount is made up from wages and annual leave monies owed, then normal tax and national insurance contributions will apply).
• A PILON (Payment in Lieu of Notice) clause may be included as part of the contract (please see below for more information on the definition of a PILON).
• It is normally requested that a ‘tax indemnity’ clause is provided. This removes all liability from the employer in regard to any tax or national insurance money owed on payments contained within the agreement.
• A mutual covenant not to make deprecating comments about the opposing party. This works both ways, providing protection for the employee and employer against potential slanderous remarks against them.
• A confidentiality clause. This ensures that the employee does not release any specialist information gained from their employment contract to a 3rd party i.e., not giving away any ‘trade secrets’. Another aspect of this clause is a prohibition on the former employee from sharing any information about the company’s service contracts or fellow colleague’s employment contracts with outsiders.
• A legal claims clause. These will normally be long and comprehensive. The contract will detail a list of all potential legal claims that the employee is restricted from bringing against the employer. Employment tribunals have made it clear that an employer cannot merely state that an employee is unable to bring legal action against them, a clause as Is a settlement agreement mandatory?
What is a PILON (Payment in Lieu of Notice)?
A ‘payment in lieu of notice’ is a sum of money paid by an employer to compensate an employee for not working the notice period required under their contract. These types of payments can be used in cases where the employer does not wish the employee to physically be present at work for his/her notice period.
Legally an employee must be able to earn what their contractual earnings would have been if they had worked the notice period in full, a lesser sum cannot be offered as a PILON.
If monies are received under the PILON umbrella, then they will be classed as being received whilst in employment and therefore will be subject to tax and national insurance.
Does a settlement agreement prevent me from taking any legal action against my employer?
No. A settlement agreement will only apply to the subject of the original breach. The law makes it very clear that it is not legal for an employee to ‘contract out’ of his/her employment rights. Therefore, if a separate claim against your employer arose you would not be barred from bringing this before an Employment Tribunal, irrelevant of the settlement agreement.
Generally, claims that are made after settlement agreements are signed are as follows:
- A breach of contract claim (regarding the terms of the agreement)
- Personal injury claim (which is not excluded by the agreement)
- Claims in relation to accrued pension monies
What is Garden Leave?
As mentioned above, an employer may prefer an employee to physically stay off work, whilst still being paid under their employment contract. Garden leave is an arrangement where the employer still pays the employee’s salary whilst keeping them off work. This can apply at any time, whereas a PILON is specific to an employee’s notice period.
Employers may choose to keep an employee off work for many different reasons, some examples are; logistical reasons such as office space, if the employee is particularly troublesome, or lastly the employee imposes a risk of poaching customers or staff members.
An employer is normally only able to enforce garden leave if there was a provision providing for this in the original contract of employment. Nonetheless, garden leave is often negotiated as part of an employment compromise agreement.
Don’t forget to ensure that you need independent legal advice on your UK settlement agreement – otherwise it simply will not be binding. When choosing a solicitor to advise you, ensure you choose specialist employment law solicitors.
Looking for Settlement Agreement Advice in Hampshire? Call us now
If you live in Hampshire, and you need independent legal advice on your agreement, simply contact us now for FREE initial phone advice
- just call us on FREEPHONE 0800 1404544 or on one of our local Hampshire numbers – ANDOVER (01264) 364433 or FORDINGBRIDGE (01425) 652110 OR
- E-mail us using the online enquiry form below:
Bonallack and Bishop, Bonallack and Bishop
Suite 1, Healey House, Dene Road, 5, Provost Street
SP10 2AA SP6 1AZ
Tel: Andover (01264) 364433 Tel: Fordingbridge (01425) 652110
Our Andover Office