Staff redundancy rates have been increasing since the early part of 2022, and have risen from 1.9 per 1000 employees to 3.4 per 1000 employees, according to recent figures from the ONS.
As a result, DAS Law is witnessing a rise in legal advice calls, with employees facing difficult conversations with their employers. These situations often prove stressful but discussing a settlement agreement with your employer can help to resolve a dispute quickly and amicably.
It is important that employees secure the best financial settlement they can achieve (deserve) from their employer. At DAS Law, we’ve helped thousands of people in this situation do just that.
Kath Kidd, DAS Law
Settlement agreements are a much simpler and stress-free way to settle a dispute compared to having to make or defend a claim via the courts or tribunal. Settlement agreements are also being used more and more in redundancy situations.
Kath Kidd, Employment Specialist at DAS Law, says;
“Being made redundant can be an extremely stressful experience for an employee, particularly during such challenging financial times. Therefore, it is important that employees secure the best financial settlement they can achieve (deserve) from their employer. At DAS Law, we’ve helped thousands of people in this situation do just that.”
But what exactly is a settlement agreement, what protection does it offer and is it legally binding?
Kath outlines the process and gives an overview of the information needed below.
What is a Settlement Agreement?
A settlement agreement (previously known as a compromise agreement) is a contractual agreement made between an employer and employee to settle any claims or potential claims the employee may have against their employer.
When are Settlement Agreements used?
They are often discussed when the parties are in dispute and are utilised to agree a clean break between both parties.
How do they become legally binding?
For a settlement agreement to be legally binding on the parties, it is required that the employee takes independent legal advice on the draft terms by a qualified employment lawyer. It is generally the responsibility of the employer to contribute toward any legal fees incurred. The average contribution from an employer is in the range of £300 to £500 plus VAT.
At this point, employees need to ensure they are getting the financial settlement they deserve, and this is where the experts at DAS Law can help.
DAS Law’s employment team has been providing advice, to employees, on the terms and negotiations of settlement agreements for many years. Our deep expertise and experience have resulted in us recently launching our own dedicated settlement agreement service aimed at supporting employees with disputes.
What to do next
If you are facing a redundancy situation and would like to discuss/or have been offered a settlement agreement by your employer, contact DAS Law for a free consultation at daslaw.co.uk/redundancy, or by calling 0344 264 0102.
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Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created.