Examples of Settlement Agreement Compensation Cases

26 October 2017

An Employment Settlement Agreement (formerly known as a Compromise Agreement) is a legally binding contract between an employee and their employer. In this agreement the employer makes an offer of compensation to the employee (usually a lump sum of money) so that the employee does not bring a claim/s against the employer.

Employment Settlement Agreements are frequently offered by employers to employees when their employment rights have been breached. This is offered as an alternative to the employee bringing an Employment Tribunal claim against their employer.

Getting a Fair Settlement Agreement

How do you know if a settlement agreement package should be accepted?

To establish whether an employee has been offered a settlement package worth accepting, all the circumstances of the employee’s employment and background need to be considered. The wording of the Settlement Agreement will need to be carefully reviewed to check that there are no clauses or terms that will have a negative impact on the employee.

It’s important, therefore, to obtain independent legal advice. An Employment Solicitor can provide legal advice and negotiate the terms of the Settlement Agreement, to ensure that the outcome is fair.

At Co-op Legal Services our Employment Solicitors have successfully acted for numerous clients, negotiating fair Settlement Agreements on their behalf. Here are 3 examples of actual cases:

Dismissed from Work – Settlement £10,000

A client in London was dismissed from his job, he was offered redundancy pay and accrued holiday pay, but nothing else. Our Employment Solicitors assessed his legal position and contacted his employer to negotiate the terms.

Initially the employer refused to engage in negotiations, so we took the first steps towards an Early Conciliation (which is a prerequisite to bringing an Employment law claim). This lead the employer to engaging in Settlement Agreement negotiations.

Our client received over £10,000 compensation which was a 50% increase on the original redundancy package offered by his employer.

Redundancy – Settlement £250,000

A client in Derbyshire was offered an Employment Settlement Agreement by his employer following a company merger. The restructuring of the management team meant that his job would no longer be required.

Our Employment Solicitors reviewed the client’s contract of employment and the proposed Settlement Agreement. We found that some wording was missing in the agreement, which would result in our client actually receiving less than the amount offered. We requested an amendment to this wording, along with some other required amendments that we had discovered.

Within 2 weeks of instructing Co-op Legal Services, our client signed a Settlement Agreement for almost £250,000

Asked to Leave Job – Settlement Confidential

A client contacted us after she was unexpectedly asked to leave her employment. She had been working at the company for 10 years and was given no reason as to why she needed to leave.

She had been offered a Settlement Agreement by her employer as a way of bringing her employment to an end. Our Employment Solicitors reviewed her legal situation and concluded that the compensation offered in the Settlement Agreement was insufficient.

We contacted the employer, highlighting the errors they had made and proposed a counter offer. We outlined the further action that would be taken if the counter offer was not accepted.

The employer accepted the counter offer, which resulted in an increased compensation payment being made to our client. Details of the settlement figure are confidential.

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