You’ve just been given a settlement agreement. The surprise meeting with HR has just finished, and you’ve got to decide what to do next.
You are likely experiencing a range of conflicting emotions: numbness; shock; dismay; anger.
Although, for some people in your position, there is sometimes a dim sense of opportunity flowing
from what has just happened. Maybe that’s how you feel? Maybe it’s just too early for you to
process how you feel?
It’s a legal requirement that you seek independent advice on your settlement agreement, and People Law is here to help and support you with that. But before you get that legal advice, here are some early (yet simple and important) practical steps to consider to give you the best chance of
maximising your negotiating position with your employer:
Whether you want to be or not, you are now in a negotiation situation with your employer. Recognise that. As with all negotiating situations, you have to be careful about how you play your hand. Before you have had the chance to meet your solicitor and fully understand your legal position, “less is more” when it comes to what you say to your employer about whether (or not) you intend to accept the settlement agreement, and why. Don’t say too much too soon!
When the dust has settled from the meeting with HR, take a breath. Then, sit down and write a chronological account of events that have led to you being offered the settlement agreement. It doesn’t have to be “War and Peace” - just enough so that the key dates, key events and key conversations that have led to this point are as clear as you can remember them. The discipline of writing events down chronologically will really help you clarify your own thoughts, not to mention help your memory. And you can also send it to your solicitor in advance of meeting them - which will help your solicitor to help you.
Separately, write down for yourself an answer to this question: “What would I like to achieve from this negotiation?”. It’s OK that you might not be sure yet – in fact, you probably aren’t; but writing down your provisional ideas will also help you clarify your thinking about what might be possible. It might be an enhanced compensation package; a better reference; an agreed announcement; you might want to leave even earlier than is being suggested. Or later. Or, not at all. Whatever those ideas are, write them down - we can’t emphasise enough how doing that will help you to clarify your own thinking. It doesn’t matter that your objectives may well change once you’ve been able to take strategic legal advice - in fact, they probably will. But this discipline of writing down at an early stage your initial thoughts on what you think you might want to achieve will help give you a sense of mental stability and clarity. It will also help you to get the most from your initial meeting with your solicitor.
Be careful about being too keen to negotiate for a detailed glowing reference as part of the settlement agreement. Longer term, that might actually disadvantage you in your job hunt if you do decide to move on. That’s because, these days, the majority of employers just give “brief factual references”. Detailed glowing references which are fixed for all circumstances, because that precise reference wording is what a settlement agreement says the employer must always write) can, unfairly for you, raise red flags for potential future employers about why you left your last job. Discuss these issues with your solicitor.
If you do sign the settlement agreement and leave, you may well want to get another job in your industry as quickly as possible. Always show your solicitor your employment contract, so they can check whether you are subject to enforceable “restrictive covenants” which might prevent you working elsewhere for a period. The disapplication of those restrictive covenants can always be part of the negotiation with your employer, enabling you to get a new job much more quickly.
Might you be paid more than £30,000 under the settlement agreement, in addition to your notice pay? If so, although the first £30,000 might be tax-free, the excess over £30,000 is subject to deductions for income tax, and your employer also has to pay Employer NICs on it. There might therefore be significant tax advantages for you if your employer pays some or all of the excess over £30,000 into your pension scheme. This possibility is often overlooked - and because of the potential Employers NICs saving, even has the potential to be a “win - win” negotiation point. Overlooking this point can leave substantial sums on the negotiating table.
We really do understand that this may well be an emotionally charged time for you. Perhaps even
one of the toughest periods of your working life. But we are here to help you. We will take the time
to help you really understand all of the options that might be open to you, and then support you in
making the best strategic choices for you to achieve the most that you can from this
Before advising you, we will listen carefully to understand what led to you being offered the settlement agreement. We help you to understand all of your potential options and regain a sense of having some control over your situation.
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