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.