A method of resolving disputes between an employee and employer is by way of a settlement agreement (or compromise agreement). This type of document is a special agreement which effectively protects the employer’s position by ensuring that, once signed by both parties, an employee cannot bring a claim to an employment tribunal. In return, the employer agrees to pay the employee a sum of money which is often referred to as a Compensation Payment or Termination Payment. The agreement is special as, unless certain conditions are satisfied, an employee may still be able bring a claim to an employment tribunal, even if he or she signs the agreement.
One such condition is that the employee must have received advice from a relevant independent adviser as to the terms and effect of the agreement and the ability of the employee to pursue a claim before an employment tribunal. We are a firm of solicitors and every solicitor we employ is a relevant independent adviser within the meaning of the Employment Rights Act 1996 and other corresponding Acts of Parliament including the Equality Act 2010.
It is customary for the employer to make a contribution towards the employee’s legal costs. £300 plus VAT is usually an adequate sum for the solicitor to meet with the employee, provide the necessary advice and sign off the agreement.
As a relevant independent adviser, our role is to assess whether the employee has any potential claims against the employer, assess the value of any such claims and then advise as to whether the sum being offered by the employer is reasonable. If the sum being offered by the employer is reasonable and the employee would like to accept the sum being offered then, following any minor amendments, the agreement will be signed by both parties and the matter is at a conclusion.
We are able to have a consultation with an employee either in a meeting at our offices or via telephone.
If we are acting for an employer or associated employer of the employee, then we are unable to advise the employee as we would not then be a relevant independent adviser.
For more details visit our settlement agreements website.