Settlement Agreement - Mutual Termination

Bernie89

I have been offered Mutual Termination by my employer and have been advised they will pay for legal fees subject to my acceptance of the offer. I have read online that "an employee is under no obligation to accept a settlement agreement and should only do so once independent legal advice has been obtained". I have been told by my employer that they will only pay towards the legal advice subject to my acceptance. My solicitor requires the settlement agreement in order to give me the advice. Please help, I'm so confused.

Caroline_a

I think it is usual for the solicitor to check the settlement order prior to it being signed. The solicitor then signs to say that he's checked it and all is in order.

Undervalued

Keep in mind that the fee the employer normally pays will only pay for the solicitor to do the bare minimum the law requires. That is advising you that you will be signing away (almost) all rights to make any claim against your employer. The solicitor will issue a certificate to say that has happened.

If you want the solicitor to do more, perhaps negotiate on your behalf for a better settlement etc, you will almost certainly have to pay for this yourself.

Most settlement agreements are for a sum of money (generally tax free up to £30K), an agreed reference, a confidentiality agreement and an undertaking that neither party can speak ill of the other.

Obviously it all comes down to how strong a negotiating position you are in and how much the employer wants to control what happens after you leave.

steampowered

In relation to settlement agreements for employment disputes, there is a legal requirement for a legal professional to provide advice on the effect of the settlement agreement.

If that doesn't happen, the settlement agreement will not be legally binding on either party. Hence why employers usually pay for the advice - because if the employee doesn't get that advice the settlement agreement isn't worth the paper it is written on.

The legal requirement is only to get advice on the effect of the settlement.

Usually the employer will only pay that bare minimum. This would not cover legal advice on whether the terms of the settlement agreement or fair, or negotiation of a better settlement.