You’ve agreed the deal – the next step is to document it. Choosing the right type of document for the circumstances is key. Below is what you need to know:
Settlement agreement – the employee settles any employment law claim that is listed (whether contractual or statutory – save for a handful of exceptions). To be legally binding, the employee must take independent advice from a lawyer on the terms and effect of the agreement. You’ll need to contribute towards these costs and negotiations can often be lengthy!
COT3 agreement – a great option if ACAS early conciliation has been triggered. Usually short-form agreements making them ideal for more straightforward situations. There’s no requirement for employees to take legal advice on the terms. Bear in mind though that ACAS are not always willing to support with these agreements (for example if you’ve involved them at a late stage of any deal). Our Intelligent Employment platform includes our up to date COT3 agreement template – for more information on accessing our documents, get in touch.
Contractual termination letter – use with caution! It confirms that in return for a payment, the employee waives any contractual claims but doesn’t prevent them from bringing a statutory claim against you. Great for low-risk scenarios or scenarios where there is little cash incentive to signing the agreement.
If you’d like to discuss your options on how best to approach an employee exit, get in touch. You can revisit everything we’ve covered in the ‘Tribunal tales’ series here.