To think settlements/compromise agreements can’t be THIS common…?!

I got £105k 23 years ago.

Most people don’t want to lose their jobs, so making unfounded claims to hope to get a few thousand isn’t really worth it. You’ll get nowhere making up a bullying claim without any evidence.
The big numbers would suggest the claims are not unfounded (in the case of discrimination).

In my case, they were making a large number of redundancies over the threshold for reporting which they wanted to avoid.

And most people won’t know about them because you’re not supposed to talk them 🤫

Sex discrimination whilst on maternity leave. Had evidence of extreme racist views - not towards me but to potential staff. Tgeir lawyers advised them to pay me off as the costs had they gone to court would’ve been humongous. They didn’t have a leg to stand on basically

Career-wise, is it usually the person who gets the settlement or the person who caused the settlement to happen that struggles with that employer/other employers afterwards?

Very very common in my current company. It’s staggering how much money we spent on settlements.

They are very common. It's usually cheaper to pay someone off than go through the tribunal process, even if the employer ultimately wins and especially if you consider reputational damage. There's also the copycat effect, if another employee sees a report of a tribunal against their employer Company X, they might think about their potential grievance that they'd otherwise not have bothered with. The payoff isn't necessarily just this one case.

FWIW compromise agreements are commonly used to skirt round redundancy laws too. I was one of a number of employees offered a compromise agreement as an alternative to redundancy, I accepted because it meant more money than I'd have got if I'd insisted they stuck to the redundancy process and I didn't have to work the notice period. Yes I could have refused and they'd have to have done the proper consultations etc., but ultimately I'd have still lost my job.

HR in private sector. They’re really common.

It doesn’t mean the person isn’t performing. Sometimes it is a change in role requirements, or new leadership, or their style just doesn’t work anymore, or a personality clash, or they know too much, or they’ve just done their time, or we’ve done something wrong to them.

Notice + 3 months is a usually starting point for any settlement that involves issues on our part.

Most senior exits are settlements

Yikes! £200,000!! Am I allowed to ask what they did?

Very rare. Most settlement agreements in PS require substantial approvals and aren't something HR or a dept can agree too

Mine was over 200k 🤷‍♂️. I doubt they’re lying. Big settlements do happen when the Company is totally in the wrong

It probably doesn't much happen in the public sector because, if you've been treated in a way that is unlawful and you raise a grievance (preferably supported by your union), there is no case to answer and they have to back down.

In the private sector, my husband was unfairly treated during a period of sick leave, caused by the company, and raised a grievance to counter a disciplinary. He was still too unwell to deal with it and got his union involved - although the company wanted him to continue with them, he had lost faith in them so was offered (and accepted) a very good redundancy package. They did not want to take it to tribunal because they had acted unlawfully.

Moral of the story is that union membership is worth having, because union representation is legally allowed where other support is not permitted.

I swear you’ve posted this exact post before, maybe 3-6 months ago!

I know multiple people who have them,

Most work in finance and are very legally clued up.

One person got a LOT after she was sexually harassed and it turned out her boss had a major history of it.

depends on the company and industry

Private sector and pretty common in the company I work for too.

In almost all cases I've been aware of it's been a case of a senior manager who is (or is perceived to be) underperforming and it's a way for the company to remove them quickly and quietly with a minimum of fuss so they can bring somebody new into the role. Going down a performance management process is time consuming and difficult, and redundancy is problematic if you want to replace the role like for like.

I also got one in the past when my role was made redundant as part of a bigger restructure, and I was offered an attractive settlement package to stay on for longer to support the transition.

And then of course they also happen commonly if a person has a valid case that could go to an employment tribunal.

In my experience though they are most commonly used at senior management level, except in the case of an ET threat.

I think completely unfounded claims are quite rare. Although I think opportunistic things like @Whyherewego points out are probably more common. That person who isn't performing well but realises if they say it's discriminatin they'll get more. It's tricky even in those situations because it's still not cut and dried - maybe the performance WAS because they were being treated badly? Or perhaps their performance could have been better, but the performance management process was handled badly. And sometimes, it really is just that the type of person who gets managed out for being underperforming AND hard work is ALSO the type of person who then claims they were disriminated against.)

In tangentally involved in a situation currently where as much as anything, I think it's a culture clash. Standards from the senior leadership team are very high and the person is not performing, which in itself isn't the main issue as they're very willing to work with her to help her improve, BUT she doesn't understand why it's such a big deal. "But it was just a small mistake" or "But I did these other 4 things well" or whatever. She doesn't stand a chance frankly.

How od you know they're unfounded? It's clear you think the woman in your OP didn't deserve one and wasn't actually discriminated against, which is just your opinion and clearly irrelevant as you weren't the person deciding whether or not she got a payout.

Basically how my company operates - we're in tech so lay-offs and culls of talent are commonplace/happen on a regular tic. Overwhelming majority of people who are pushed out will get a decent settlement upon leaving as a matter of course, obviously in return for agreement of no further claims against the employer.

Sadly yes. It's so expensive for big companies to go to tribunal as lawyers fees are so high.
I had a case where we paid out a huge amount for someone we'd made redundant before we even knew she was pregnant, she was about 8 weeks. She claimed discrimination which was not possible as we definitely didn't even know she was pregnant and we'd run a very transparent process based on well known objective criteria and she'd objectively not hit the bar. But it was just easier to cough up

Crikey, had no idea these things happened & wish I had. No wonder my line manager & HR wanted to talk to me when I decided to leave & sent them a list of reasons why!

@madamweb in my case, and I think it's quite common, my boss was super senior and super loved by the CEO (who, frankly, wasn't a nice person either). After the CEO went, none of us were particularly surprised when our toxic manager left shortly thereafter.....(we have a support group. Seriously.)

It's also common if the person who is toxic is considered to be very valuable so a trader in a bank, a senior partner in a professional services firm etc. The person makes a lot of money, so the cost of having to rehire more junior staff is less important, even when those so-called "junior" staff are still on big salaries.

Sometimes, especially in firms like law firms or accountancy firms, if the person who is toxic is a partner, it can be difficult to get rid of them AND it is worse for the firm's reputation if a partner is potentially doing things that are bad reputationally, but the perception is that the best way to protect the firm is to protect the person.

Yes, this is what I saw, heaps of settlement agreements all relating to the same manager but the directors taking years to sack the actual toxic person

You probably wouldn't know though.

I worked in a role where I saw all the agreements. You would be surprised how common they were. Sometimes to get rid of someone who was workshy, sometimes because their manager was an awful toxic bully (but baffling noone seemed to sack the manager)

I work in a senior role in the public sector. It is quite common

Yup, I think in large organisations especially they are very common either to get rid of people who for whatever reason the firm doesn't like- rightly or wrongly- or to avoid the drama, hassle and expense of a lengthy complaints procedure.

I was a relatively high earner and very clearly had a case for discrimination so they did a complicated arrangement that allowed me to.walk away with a year's pay.

Other team members just resigned etc. Took them another 3 years to get rid of the guy who was the actual problem.