Specialist Employment Compromise Agreement Lawyers
If you Are employed by the National Health Service and have been offered a settlement agreement, it is important to obtain independent legal advice before signing. That is where our NHS Settlement Agreement Solicitors come in.
A settlement agreement is a legally binding contract between an employer and employee. In most cases, the employee agrees not to bring legal claims against the employer in exchange for compensation or other agreed terms.
Settlement agreements are commonly used throughout the NHS. They may arise during redundancy exercises, disciplinary procedures, capability processes, sickness absence management, workplace disputes, grievances, restructuring exercises and negotiated exits.
Solicitors at Bonallack & Bishop regularly advise NHS employees on settlement agreements. We provide clear, practical advice designed to help you understand your options and make an informed decision about whether to accept the proposed terms.
Many NHS employers contribute towards the cost of obtaining legal advice, meaning that in many cases there is little or no cost to the employee.
Looking for specialist Settlement Agreement Solicitors? Call our experienced employment lawyers on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached
What Is An NHS Settlement Agreement?
An NHS settlement agreement is a legally binding agreement between an NHS employer and an employee.
The agreement will normally record:
- A financial settlement
- The date employment will end
- Any notice arrangements
- Agreed references
- Confidentiality obligations
- Restrictions on future claims
Most settlement agreements are governed by section 203 of the Employment Rights Act 1996.
An employee cannot usually waive statutory employment rights unless specific legal requirements are satisfied. One of those requirements is that the employee receives advice from an independent legal adviser before signing the agreement.
If independent legal advice is not obtained, the agreement may not satisfy the statutory requirements needed to prevent future claims.
Why Might The NHS Offer A Settlement Agreement?
Settlement agreements can arise in many different situations.
Common examples include:
• Workplace Disputes
A breakdown in working relationships can sometimes lead to discussions about an agreed exit.
Examples include:
- Management disputes
- Team conflicts
- Grievance complaints
- Allegations of bullying
- Relationship breakdowns
- Disciplinary Proceedings
Settlement agreements are sometimes proposed where disciplinary allegations have arisen.
The offer of a settlement agreement does not automatically mean that the allegations are proven.
Employees should carefully consider the strength of any allegations before deciding whether to accept an offer.
• Capability Procedures
NHS employers may use capability procedures where concerns are raised about performance.
In some cases, an agreed exit may be proposed instead of continuing the process.
• Sickness Absence
Long-term sickness absence can sometimes lead to settlement agreement discussions.
Where an employee has health concerns, additional legal protections may apply.
If a medical condition amounts to a disability under the Equality Act 2010, the employer may have duties relating to reasonable adjustments and discrimination.
The existence of potential disability-related claims may affect the value of any proposed settlement.
• Redundancy
Settlement agreements are frequently used during redundancy exercises.
Employees should ensure they understand:
- Redundancy payments
- Notice entitlements
- Holiday pay
- Pension implications
- Potential claims
- Protected Conversations
Employers sometimes hold discussions under section 111A of the Employment Rights Act 1996.
These are often known as protected conversations.
The purpose is to allow discussions about ending employment on agreed terms without those discussions automatically being used in later proceedings.
However, the protection is not unlimited and specialist advice should always be obtained.
Do I Have To Accept An NHS Settlement Agreement?
No, you don’t. An employee cannot normally be forced to sign a settlement agreement.
You are entitled to:
- Take legal advice
- Consider the terms
- Ask questions
- Negotiate changes
- Reject the proposal
Many employees assume the first offer is final.
That is often not the case.
Settlement agreements are frequently negotiated.
Can An NHS Settlement Agreement Be Negotiated?
Yes, and many settlement agreements can be negotiated – it is not necessarily a choice of having to accept whatever you are offered or not, there may be room for some amendment of the offered terms.
Areas commonly negotiated include:
- Compensation
- Notice payments
- References
- Announcement wording
- Restrictive covenants
- Confidentiality clauses
- Agreed departure dates
The employment solicitors at Bonallack & Bishop regularly advise employees on whether a proposed settlement appears reasonable and whether there may be grounds for seeking improved terms.
The strength of any negotiation will depend upon the circumstances of the case.
Factors may include:
- Potential legal claims
- Length of service
- Seniority
- Financial losses
- Health issues
- Procedural concerns
If an employee has potentially valuable legal claims, this may increase their negotiating position.
What Claims Might Be Affected?
A settlement agreement normally requires an employee to waive specified legal claims. Depending on the circumstances, those claims may include:
- Unfair dismissal
- Constructive dismissal
- Wrongful dismissal
- Redundancy claims
- Discrimination claims
- Harassment claims
- Whistleblowing claims
- Breach of contract claims
Employees should understand exactly which rights they are giving up before signing.
Once a valid settlement agreement has been completed, it will usually be very difficult to pursue claims covered by the agreement.
NHS Employees And Discrimination Claims
The Equality Act 2010 protects employees from unlawful discrimination.
Protected characteristics include:
- Age
- Disability
- Race
- Religion or belief
- Sex
- Sexual orientation
- Pregnancy and maternity
- Gender reassignment
- Marriage and civil partnership
If an employee believes they have experienced discrimination, this may affect both the legal position and the value of any proposed settlement.
The existence of a potential discrimination claim does not automatically mean that compensation should increase. However, it is an important factor that should be considered before any agreement is signed.
References And Future Employment
Many NHS employees are concerned about future references.
A settlement agreement can often include agreed wording for a reference.
This may provide reassurance when applying for future roles.
It is important to understand:
- Whether a reference will be provided
- What it will say
- Whether wording can be agreed in advance
For many employees, the reference provisions are almost as important as the financial package.
Tax On NHS Settlement Agreements
Tax treatment can be complicated.
Different elements of a settlement package may be taxed differently.
Potential components include:
- Salary
- Notice pay
- Holiday pay
- Compensation payments
- Pension-related payments
The tax treatment of termination payments is governed by legislation including the Income Tax (Earnings and Pensions) Act 2003.
Employees should not assume that all compensation will be tax free.
Specific advice should always be obtained where tax issues arise.
Pension Considerations
For many NHS employees, pension issues are particularly important.
The impact of leaving employment may depend upon:
- Length of service
- Pension scheme membership
- Retirement plans
- Age
- Future employment intentions
Before agreeing an exit, employees should ensure they understand any potential pension implications.
Your NHS Settlement Agreement – Independent Legal Advice Is Usually Required
A settlement agreement will normally state that independent legal advice has been obtained.
This is not simply a formality.
The purpose is to ensure that the employee understands:
- The effect of the agreement
- The claims being waived
- The legal consequences of signing
Without independent legal advice, a settlement agreement may fail to satisfy the statutory requirements needed to waive employment claims.
How Bonallack & Bishop Can Help
Employment solicitors at Bonallack & Bishop advise employees on settlement agreements throughout England and Wales.
We can:
- Review the proposed agreement
- Explain your legal position
- dentify potential claims
- Advise on compensation
- Negotiate improved terms where appropriate
- Explain tax and practical issues
- Deal directly with your employer if required
We understand that receiving a settlement agreement can be stressful.
Our aim is to provide clear advice in plain English so that you can make an informed decision about your future.
Contact Our NHS Settlement Agreement Solicitors
If you have been offered an NHS settlement agreement, contact Bonallack & Bishop for the specialist independent legal advice you need.
We can explain your options, review the proposed agreement and help you decide whether the terms are fair before you sign.
NHS Settlement Agreement Solicitors – frequently asked question
What is an NHS settlement agreement?
An NHS settlement agreement is a legally binding agreement between an NHS employer and an employee under which the employee usually receives compensation in exchange for agreeing not to pursue specified legal claims.
Do I need a solicitor for an NHS settlement agreement?
In most cases, yes. Settlement agreements normally require advice from an independent legal adviser before they become legally effective for the purpose of waiving employment claims.
Does the NHS pay for settlement agreement legal advice?
Many NHS employers contribute towards the cost of independent legal advice. The amount offered varies between organisations and agreements.
Yes. Compensation, references, notice arrangements and other terms can often be negotiated before the agreement is signed.
Can I refuse to sign an NHS settlement agreement?
Yes. Employees are generally not required to accept a settlement agreement and should obtain legal advice before making a decision.
Is compensation under an NHS settlement agreement tax free?
Not necessarily. Different parts of a settlement package may be taxed differently and specialist advice should be obtained.
Will I receive a reference if I sign a settlement agreement?
Many settlement agreements contain provisions dealing with references. In some cases, the wording of the reference can be agreed in advance.
Can I bring a claim after signing a settlement agreement?
A valid settlement agreement will usually prevent an employee from bringing claims covered by the agreement, which is why legal advice before signing is so important.
