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Tribunals

Tribunal tales #9 – settlement strategy: what kind of agreement is best?

Posted on: August 11th, 2021 by Ginny Hallam

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

 

This update is accurate on the date it was sent (25 August 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Tribunal tales #8 – settlement strategy: do confidentiality clauses work?

Posted on: August 11th, 2021 by Ginny Hallam

There’s been lots of chatter of late over the enforceability of settlement agreement clauses that require the employee to say nothing about the circumstances that led to the agreement (or anything else for that matter). Here’s how to strike the right balance when dealing with confidentiality.

Protected disclosures – make clear that nothing in the clause prevents the employee from blowing the whistle (if it looks like you’re attempting to stop the employee from blowing the whistle the clause and possibly the entire agreement will be unenforceable). Likewise, don’t expect to be able to protect the employee from working with authorities including the police about the matters covered by the agreement.

Carve out exceptions – make it clear that the employee isn’t prevented from discussing or raising specific issues. There’s no legal requirement to do this, but this drafting avoids the clause being too widely drafted and potentially unenforceable.

Protecting wellbeing – call out that employees can speak about the terms of their agreements with professionals providing them with medical, therapeutic, counselling, legal or financial services.

Get in touch if you’d like to access our compliant and commercially robust settlement agreement template, or if you require bespoke drafting and advice.

 

This update is accurate on the date it was sent (18 August 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Tribunal tales #7 – settlement strategy: creating an interesting offer

Posted on: July 7th, 2021 by Ginny Hallam

Whilst the termination payment is usually the main focus, there are lots of ways to make a settlement offer more attractive without incurring much, if any, additional cost. Below is some food for thought: 

Continue employee benefits – if you’ve already paid the annual premium for benefits (such as private medical or life assurance), allow access to those benefits for an agreed period after the employee has left (subject to insurer approval).

Outplacement and coaching support – a positive step to support employees in securing a new and exciting challenge. You can set a capped contribution (so it won’t break the bank) which can be offered tax efficiently. As members of the The AdviserPlus Group we’re able to provide this support – click here to find out more.

References and announcements – agreeing a factual reference and internal/external announcements means you’re able to work together with the employee controlling the messaging around their exit and supporting them with their hunt for the next role.

Fast payment – promising speedy settlement payments means the employee feels they’re in touching distance of the financial support – costing you nothing and often enough to secure the deal.

Get in touch if you’d like to discuss a tricky exit or your template settlement agreement. In our next update we’ll focus on limitations to confidentiality clauses and your options to capture the agreement terms. 

 

This update is accurate on the date it was sent (7 July 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Tribunal tales #6 – settlement and protecting negotiations

Posted on: June 21st, 2021 by Ginny Hallam

Not all settlement negotiations result in a deal. So, protecting any offers you make is crucial to ensure they can’t be used against you in future litigation.

‘Without prejudice’ and ‘protected conversations’ can be used to protect exit negotiations but are often confused leaving you unknowingly exposed. Both have their uses! Here’s what you need to know:

Protected conversations 

A relatively new concept, they allow for discussions about exit without exposing you to claims for unfair dismissal (unless there are allegations of ‘improper behaviour’ against you such as putting undue pressure on the employee). They DON’T protect against other claims, including discrimination or whistleblowing.

Without prejudice 

Only available for existing disputes (where the employee has raised a grievance, for example). Assuming there is a dispute, ‘without prejudice’ conversations protect against all claims, including discrimination and whistleblowing.

Get in touch if you need to discuss your options with how best to approach settlement conversations. In our next update we’ll look at the non-financial elements of a settlement offer. 

 

This update is accurate on the date it was sent (22 June 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

Tribunal tales #5 – settlement and timing it right

Posted on: June 8th, 2021 by Ginny Hallam

Securing an early deal can protect reputation, avoid unnecessary legal fees and save time. But, ill-timed settlement negotiations can mean overpayment, increased tribunal risks and a worsened negotiating position. Here are our thoughts on getting the timing right in respect of negotiations:

Before delivering an outcome – if you know successful litigation is possible, consider opening a settlement discussion before progressing or finalising a formal process. Employees may be incentivised to take a deal to avoid a possible dismissal.

Sit and wait – when bringing an unfair dismissal claim, employees are obligated to try and mitigate their losses by securing a new job (see our previous update). If the ex-employee secures a job it’ll reduce your exposure to compensation and, in turn, improve your negotiating position. Top tip – write to the employee early on to remind them of their obligation to mitigate! Find out how to access our mitigation letter template.

Call their bluff  – lots of employees threaten litigation but don’t follow through. Before an employee can issue a claim they have to go through mandatory ACAS early conciliation. ACAS should contact you to let you know the conciliation process has started. If you don’t hear from ACAS, it usually means the employee has decided not to litigate and there’s no need to put forward an offer.

In the following update, we’ll look at how to approach settlement discussions, limitations to confidentiality clauses, and ways to make a settlement offer more attractive.

 

This update is accurate on the date it was sent (9 June 2021), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.