Redundancy - getting a solicitor

D_Dickenson

A friend has been working for a French company in London for 3 years on a UK contract. She is facing redundancy and her employers have said that the legal way is to offer her 3 months notice + owed annual leave + 3 years worth of £430/week = £1290.
They are willing to offer her the same package (3m notice + paid holiday) but with £2600 instead of £1290 if she agrees to sign a private contract where she will lose the right to sue them.

She has been told by a solicitor friend that "... if you have to sign a compromise agreement signing away your rights to bring a claim you need to get advice on it from a solicitor for it to be valid and they will pay a contribution of your legal fees for that (usually £250-500)".

Does this sounds correct advice - ie she needs formal assistance from a solicitor and it will be paid for by the company? She has a final meeting on Thursday with the employers to finalise everything so any advice on this or anything else to ask for would be appreciated.

Uncertain

Largely correct - yes.

For a compromise agreement to be valid the OP has to be advised by a solicitor or (less common) a specially trained trade union official. The advisor has to hold special insurance and issues a certificate which forms part of the agreement.

It is customary for the employer to pay a sum of money towards this (as you say £250 to £500 is common) but this is not actually mandatory. At the end of the day, it is the bottom line that counts!

Given that most solicitors charge at least £200 per hour the basic sum will only really pay for the legal minimum. If you want the solicitor to negotiate on your behalf you will need to pay more. It is unlikely the employer will want to pay for this but it can sometimes be a sound investment.

Linton

Uncertain wrote: »

Largely correct - yes.

For a compromise agreement to be valid the OP has to be advised by a solicitor or (less common) a specially trained trade union official. The advisor has to hold special insurance and issues a certificate which forms part of the agreement.

It is customary for the employer to pay a sum of money towards this (as you say £250 to £500 is common) but this is not actually mandatory. At the end of the day, it is the bottom line that counts!

Given that most solicitors charge at least £200 per hour the basic sum will only really pay for the legal minimum. If you want the solicitor to negotiate on your behalf you will need to pay more. It is unlikely the employer will want to pay for this but it can sometimes be a sound investment.

Are you sure about this?? When I took voluntary redundancy I signed a compromise agreement without any advice. None was needed - I wanted out and the employer was willing to pay me generously.

Pricivius

Yes - Uncertain is correct. For a compromise agreement to actually work, the employee must have received independent legal advice. They are compromising all claims so they must have had the implications of this explained to them by a solicitor.

It's possible your company took a chance with your agreement, but the fact of the matter is that you didn't actually compromise anything if you didn't get legal advice and you could have brought any of the claims it restricted you from bringing. Maybe they trusted you, or maybe they didn't know what they were doing.

Uncertain

Linton wrote: »

Are you sure about this?? When I took voluntary redundancy I signed a compromise agreement without any advice. None was needed - I wanted out and the employer was willing to pay me generously.

Yes I am!

What you describe was fine for you but it gives the employer no protection whatsoever so I am amazed they were willing to take the chance.

The point of such an agreement is that it ends the matter once and for all. The employee gets (usually) more than their statutory entitlement and often an agreed reference in exchange for agreeing that they will make no further claim against the employer.

The law says that such an agreement is only binding on the employee if they have received independent professional advice from a qualified and insured person. This is to stop an unscrupulous employer offering, say, a thousand pounds to go quietly when the employee may have a valid claim worth many times that.

The only alternative is a similar "COT3 agreement" made via ACAS. If an ex employee launches an employment tribunal claim against his former employer ACAS will become involved in an attempt to broker a settlement. If the parties agree then they draw up such a document which again is final and legally binding.

There are actually a couple of claims which can't be excluded even with a compromise agreement such as personal injury which was not apparent at the time of signing.

Linton

Apologies - You are both right!! I checked my records and it seems I did get the legal advice paid for by the company. I wouldnt have had any issues to discuss with the solicitors so I had forgotten the whole thing, and I guess the solicitors are more than happy that they got their £250 with no efforts on their part.

getmore4less

The OP needs to establish what is being comprimised.

If the company has nothing to worry about why are they offering more money. if they do then negotiate for more

Statutory is weeks pay capped at £430 so first uplift is full pay then maybe 2weeks per year that starts to get reasonable.

If the 3month notice takes them into 4 years service then thats another negotiating angle.

Don't ask don't get

Also try to negotiate outplacement support

AIUI french law gives them much better terms so they are used to paying out.

Uncertain

getmore4less wrote: »

The OP needs to establish what is being comprimised.

If the company has nothing to worry about why are they offering more money.

Maybe but that doesn't always follow.

Some companies tend to offer a little extra money in exchange for a CA as a matter of course.

They simply see it as the cheaper option. Fighting claims, even if you ultimately win them, cost time and money.

D_Dickenson

getmore4less wrote: »

The OP needs to establish what is being comprimised.

If the company has nothing to worry about why are they offering more money. if they do then negotiate for more
..

AIUI french law gives them much better terms so they are used to paying out.

My understanding is that since my friend is the only person on a UK contract in the company (3000 people in the company in France) that for simplicity they just want the UK office (2 people) closed and finished with, hence the slightly favourable terms offered over the minimum.

If the advantage of having the CA is only for legal protection for the company then there seems no point doing one since they have not mentioned it.

It seems they are already offering 2 weeks per year instead of the minimum one. Is the offer reasonable enough to just accept or is it worth asking for a bit more and let them finalise everything quickly?

D_Dickenson

getmore4less wrote: »

Don't ask don't get

Also try to negotiate outplacement support

AIUI french law gives them much better terms so they are used to paying out.

Not really sure what outplacement support is - a quick Google search suggests retraining for another career. I'm not sure they would provide that from France but maybe they could contribute towards the costs of it? What would be a reasonable figure to ask for?

Indeed French law gives much better protection - the other worker in the London office is on a French contract and has been offered a position in France accordingly. My friend on the UK contract has not been so lucky.

Uncertain

D_Dickenson wrote: »

If the advantage of having the CA is only for legal protection for the company then there seems no point doing one since they have not mentioned it.

As I mentioned it is unlikely the company will pay over and above the legal minimum without a CA in place. However, if they will then fine.

The only other advantage from the employee's point of view is if the agreement contains a legally binding agreed reference. Sometimes this can be worth far more long term than a cash settlement.