Settlement Agreement Advice

adamL

Hello,

I'm looking for some advice regarding a Settlement Agreement offer that has come completely out of the blue (not me, but let's just say a very very close member of family with the outcome significantly affecting me as well).

The threat was, accept the settlement agreement by X date or we will put you on a performance plan. 

Worked at the company for 14 years. 

Notice period is 3 months. 

Offer is about 2 months gross pay (untaxed as below £30k) and notice period. In my eyes not particularly generous. Redundancy would be about the same.

Currently off sick (since this news) with stress. Seeing the doctor asap. Full Sick pay for 6 months. I have already sought alternative therapy for stress issues caused by the workplace. No formal grievances (should have done one but didn't) as swallowed pride and kept professional. 

(Part removed)

Company will cover basic solicitor fees. 

Anyway... Any tips? This has the potential to destroy out finances. 

Thank you
Adam

tacpot12

The threat of a performance plan indicates that they want to manager your family member out and a performance plan can be manipulated to make it impossible to improve, so dismissal is the likely end result. This would be quite a bad outcome as the employer could legally give the family member a reference that says they were dismissed for performance reasons. 

Your family members options are to

• accept the deal being offered (knowing that they are good at their job and that they can paint this in a good light and their employer in a very bad light if they leave) 
• tough it out (i.e. do nothing, and just wait to see what happens on the performance plan)
• up the ante (get a lawyer that will sue them hard)
• resign and claim constructive dismissal

The time to resign if they want to be able to claim constructive dismissal might be now.

If you have legal expenses cover as part of your home insurance, try to talk to the legal helpline to get a view on whether upping the ante is a good strategy? i.e. do they thing that your family member has a really good case. If so, the result might be a better settlement, or it might be they back down. You might need to check if the company pays for a solicitor is there a confidentiality arrangement that means the strategy won't get fed back to the employer.

adamL

Thank you for the reply.

Sadly nothing on the home insurance. Checked that a few days ago. 

Yes they do pay for a solicitor up to a fixed amount, and a call is scheduled very soon as the clock is ticking. Just trying to understand opinions on what's a fair amount on a settlement agreement after 14 years employment. Can't paint employer in bad light due to the Settlement Agreement having clauses in there - basically they are buying my partner's silence for not much money right now. 

tacpot12

Probably best to go in hard for a 'fairer' settlement. 

The basic award from an Employment Tribunal would be similar to redundancy, but there is the possiblity of some uplift, as compensation for mistreatment/not following correct process and if this mistreatment has caused severe depression. Other payments can be made for lost of income and loss of employment rights. 

I'd probably ask for another month of pay on the basis that hiring times are longer these days and/or that she would be entitled to six pay for six months if she want to go down that route. It could easily take three months to be hired again into a comprable role.  In my experience, it's always good to give a reason for asking for more. 

kempiejon

Twice I have been settled out of jobs. Neither time was particularly pleasant but most recently I got something not too distant from what I wanted and ultimately a positive result for me.
If your partner really wants to leave, if job is making them unwell staying is a being a fool to themselves.

Just trying to understand opinions on what's a fair amount on a settlement agreement after 12 years employment. Can't paint employer in bad light due to the Settlement Agreement having clauses in there - basically they are buying my partner's silence for not much money right now. 

If you want to extract maximum compensation from them, that sounds like a fight. Get legal advice now. Best thing being made redundant first time around and having to fight it on my own to begin with was when the company finally paid for a solicitor so I could agree their compromise agreement my brief showed me how to maximise any settlement amount and the great list of extras the solicitor can push for and the cost to the employer to defend it. 2nd time around I was looking to resign and pursue compensation, ACAS said don't be shy lodge the greivance, this is good advice and do it whilst on the sick for the next 6 months. In fact perhaps a couple to include performance management with no sight of the company policy on dismissal etc. 

Although you say out of the blue Sidelined significantly since returning from maternity leave a few years ago. Gone from doing "senior management" work to "administrative" work. Sounds like a concerted effort long term victimisation of your SO. So perhaps there's case to answer.

In both my experiences however fighting was hard work and as upsetting as being in the post while being undermined, lied to and bullied. I wrote a letter stating exactly what I wanted, they offered a bit less but good enough and I was happy to get out with a clean break. The settlement was slightly better than redundancy as I worked some extra pension into it and was nearly able to access my pensions so it suited me. Well being is really worth more than money so if the settlement give a break and a cash buffer it might be better tan the alternative and a known outcome.

Sarahspangles

There’s a balance to be struck between achieving the optimal financial outcome and the optimal one in terms of the family member’s wellbeing. Roll forward a year - what needs to happen now in order for them to be settled in a new, less stressful job? How are they going to present the end of this contract and explain any gap? If the job is stressful and they've already been sidelined, have they been job hunting?

Wonka_2

A difficult position to be in (and I speak from experience) but effectively 6 months money tax free assuming an immediate termination is probably as good as it’s going to get without risk. You need to make sure any outstanding holidays are paid (inc those when off sick) and negotiate for any outstanding bonuses etc. You can also ask for outsourcing assistance re finding a new role, an agreed reference etc. 

Being honest trying to sit it out/extend things with sick pay is unlikely to improve the situation and whilst the financial offer may not reduce the bad feeling/repercussions may increase e.g having to return for the 3mth notice period and being micro-managed over that period 

If you choose to accept in principle and engage a solicitor to check the terms then they may offer suggestions based on local knowledge/prior experience with the company. 

As you’ve eluded to you are selling your soul in agreeing a settlement - but without a watertight case for taking further action re dismissal then it’s big risk - especially if funds are currently tight. 

Brie

Things to consider:

• are there actual KPIs in place already?
• have there been regular documented reviews?
• have there been documented training?

No to any of those and there's a good case (in my opinion) for a better payout.

I have twice been in a situation where I was being lined up to be dismissed.  In both instances they had a list of things they said I had done wrong.  No hanging offences but just wrong.  In both instances I asked when had my errors been pointed out (they hadn't) and when had I been given a chance to improve (I hadn't).  So I stated something like "in that case you have no grounds for dismissal that would be accepted by a tribunal".  

Having a level of service in place is one thing but if the training to achieve that has been slipshod then one can't be expected to achieve it.  Likewise they can have a great training plan but if the targets have changed significantly they can't expect people to magically adapt.  If it's been a case of "shadow Bob for 2 weeks" before you're set to do the work yourself it's all too vague. 

And some things are too subjective.  I was once told I didn't smile enough at work.  Well I wasn't working with the public, I was sat in front of a computer - so what does smiling have to do with anything?


So - have all the paperwork outlining the reasons given for dismissal.  Get copies of any review documents, awards, bonuses, payrises (even if just in line with others in the role).  Get a list of questions ready to talk through with the solicitor.  Prepare a timeline from hiring to any significant events so you don't waste too much time with the solicitor having to understand what the background is (time is valuable.)   

Decide what is acceptable as a payout given the role, time and likelihood of getting another job soon.  You have to give 12 weeks notice?  What does the employer need to give?  Ask for a payout for that time plus the redundancy payout.  So perhaps 12 weeks notice plus 12 weeks? redundancy (1 week? for each year).  Plus you will need a copy of the reference letter they will send out so you know exactly what they are going to say about you.

Best of luck.

adamL

Brie said:

Things to consider:

• are there actual KPIs in place already?
• have there been regular documented reviews?
• have there been documented training?

No to any of those and there's a good case (in my opinion) for a better payout.

I have twice been in a situation where I was being lined up to be dismissed.  In both instances they had a list of things they said I had done wrong.  No hanging offences but just wrong.  In both instances I asked when had my errors been pointed out (they hadn't) and when had I been given a chance to improve (I hadn't).  So I stated something like "in that case you have no grounds for dismissal that would be accepted by a tribunal".  

Having a level of service in place is one thing but if the training to achieve that has been slipshod then one can't be expected to achieve it.  Likewise they can have a great training plan but if the targets have changed significantly they can't expect people to magically adapt.  If it's been a case of "shadow Bob for 2 weeks" before you're set to do the work yourself it's all too vague. 

And some things are too subjective.  I was once told I didn't smile enough at work.  Well I wasn't working with the public, I was sat in front of a computer - so what does smiling have to do with anything?


So - have all the paperwork outlining the reasons given for dismissal.  Get copies of any review documents, awards, bonuses, payrises (even if just in line with others in the role).  Get a list of questions ready to talk through with the solicitor.  Prepare a timeline from hiring to any significant events so you don't waste too much time with the solicitor having to understand what the background is (time is valuable.)   

Decide what is acceptable as a payout given the role, time and likelihood of getting another job soon.  You have to give 12 weeks notice?  What does the employer need to give?  Ask for a payout for that time plus the redundancy payout.  So perhaps 12 weeks notice plus 12 weeks? redundancy (1 week? for each year).  Plus you will need a copy of the reference letter they will send out so you know exactly what they are going to say about you.

Best of luck.

Thank you very much. Very useful.

• are there actual KPIs in place already?
• have there been regular documented reviews?
• have there been documented training?

All three are a no! 

We haven't even got a proper reason for this Settlement Agreement proposal yet, just some wish wash about performance. Without anything to actually back up that claim. Having gone through some stuff today, it really does appear the new starter is a direct replacement for my partner's role. The new starters job description is what my partner does. 

Trying to find the right solicitor. 

adamL

Sarahspangles said:

There’s a balance to be struck between achieving the optimal financial outcome and the optimal one in terms of the family member’s wellbeing. Roll forward a year - what needs to happen now in order for them to be settled in a new, less stressful job? How are they going to present the end of this contract and explain any gap? If the job is stressful and they've already been sidelined, have they been job hunting?

The gap will be there regardless. Nothing we can do about that but we have some ideas about what to say about the gap. 

Wonka_2 said:

A difficult position to be in (and I speak from experience) but effectively 6 months money tax free assuming an immediate termination is probably as good as it’s going to get without risk. You need to make sure any outstanding holidays are paid (inc those when off sick) and negotiate for any outstanding bonuses etc. You can also ask for outsourcing assistance re finding a new role, an agreed reference etc. 

Being honest trying to sit it out/extend things with sick pay is unlikely to improve the situation and whilst the financial offer may not reduce the bad feeling/repercussions may increase e.g having to return for the 3mth notice period and being micro-managed over that period 

If you choose to accept in principle and engage a solicitor to check the terms then they may offer suggestions based on local knowledge/prior experience with the company. 

As you’ve eluded to you are selling your soul in agreeing a settlement - but without a watertight case for taking further action re dismissal then it’s big risk - especially if funds are currently tight. 

If it was 6 months tax free, we would take it. But it's not. It's 2 months tax free, & rest (3 months) taxable at the higher rate pretty much. The 3 months is just the notice period. It's just an awful offer. 

lincroft1710

You do realise that being off sick for a long period of time gives the employer ammunition for considering dismissal on the grounds of inability to do the job