Some advice regarding a settlement

dlpfan2019

Hi all,

People were very good on here last month when I had an issue so thought I would seek some advice for a friend I was speaking to last night ( same company I worked for previously )

He has been offered a settlement package at work consisting of the following terms:

Non Discolsure Agreement
Termination of contract on signing agreement
A lump sum in April

Now the question I have is as follows, is 3 months too long for the settlement? - not been able to find anything official?

But also the terms of the agreement state that if he finds employment within the 3 months that the settlement will be reduced on a percentage scale

The lump sum is worth 8 months salary ( 3 months until April/ 5 as compensation ) so is significant and he can afford to live for the period with no work but seems restrictive to me

Obviously have told him to get it checked but wondered if anyone had any advice before he is able to

silvercar

But also the terms of the agreement state that if he finds employment within the 3 months that the settlement will be reduced on a percentage scale

Finds employment or starts employment? It needs to be the latter.

I wouldn't be happy with the 3 months until April not being paid until April. That should be up front on signing.

Assess the risk of the company going bust between now and April.

Undervalued

silvercar wrote: »

Finds employment or starts employment? It needs to be the latter.

I wouldn't be happy with the 3 months until April not being paid until April. That should be up front on signing.

Assess the risk of the company going bust between now and April.

There is no "should" in this context. With a settlement agreement the terms are whatever is negotiated between the parties. So it depends entirely on the strength (or otherwise) of the employee's position.

If he can negotiate something better then great. If not, there there are only two options......

Takeaway_Addict

Settlement agreements are up for total negotiation.


It seems a sensible offer from the employers point of view in that the offer allows for reduction.

getmore4less

I would get it clarified exactly what is on offer.

If packaged as 3 month garden leave with a compensation payment at the end then one negotiation is to make it PILON with compensation paid immediately.

if it is PILON then there is no reason to withhold payments or have the payments reduced.

If garden leave then it is not unreasonable to have that reduced if you want to leave early.

They need to decide if they want an employee they can control or not.

LilElvis

To be legally binding the employee must have independent advice - the solicitor should be able to advise as to whether the agreement is fair and recommend any changes.

marlot

dlpfan2019 wrote: »

...
He has been offered a settlement package at work consisting of the following terms:

Non Discolsure Agreement
Termination of contract on signing agreement
A lump sum in April

...

The lump sum in April could be very advantageous from a tax point of view, as long as your're sure the company will still be there. (and assuming it may take a little while to find alternative work).


I also negotiated an agreed reference. Indeed I wrote it myself.

jobbingmusician

LilElvis wrote: »

To be legally binding the employee must have independent advice - the solicitor should be able to advise as to whether the agreement is fair and recommend any changes.

Exactly what I was going to say. And the solicitor will charge - make sure the employer picks up this charge.

Undervalued

jobbingmusician wrote: »

Exactly what I was going to say. And the solicitor will charge - make sure the employer picks up this charge.

Although it is customary for the employer to pay for the employee to receive basic legal advice for a settlement agreement it is not actually obligatory that they do so.

The employer is unlikely to agree to pay for more than the absolute minimum to make the agreement legally binding. If the employee wants the solicitor to negotiate on their behalf they will almost certainly have to pay the extra themselves.