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

[Uyyyy]

A friend I used to work with recently confided in me that she had an 80k settlement (she was a high earner) after she claimed her boss didn’t like her as she was a single mother to two children with separate fathers and that he used to actively set meetings she couldn’t attend due to school pick up. She said she never had to even go to court, she just caused one hell of a fuss, went off sick and then they paid up. It turns out another friend from an entirely different company got six months pay for basically not much at all other than a fall out with line manager (large accountancy practice). I have also read the thread on here earlier about someone trying to get a settlement after being threatened with a PIP and posters saying to go for it etc… I am amazed by this, surely most companies take a hard line and force you to go to a tribunal rather than handing out a few months pay without the case even being heard?!

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.

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.

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.

depends on the company and industry

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.

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

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.

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

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

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

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

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.

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

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?

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

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 🤫

I got £105k 23 years ago.

My DH has just left with near to £250k after tax. He could have got more but accepted their first offer because it was so stressful and, well, £250k is more than enough.

Not unless the behaviour was discriminatory.

If you believe you have been treated unfairly then raise a grievance.

We don't have a grievance policy unfortunately so I don't know how to do that...

Said it before on this thread but discrimination is not the only reason for pursuing a case of unfair dismissal. It's a big one but there are lots of ways an employer can act illegally without it being discrimination.

There's no "usually" about it as it totally depends on the reasons for settlement.

If it was because of bullying or discrimination then that may impact the person responsible, if they remained in the company and if the behaviour wasn't supported by the company culture.

No reason for a settlement to impact the person who received it in terms of future employment elsewhere as the whole point is that they're private.

The law firm help them get the in-house job?

It is good business practice to keep the employee on-side with a settlement and place them at a client where they can refer work back to the law firm. I believe it is called a 'soft landing'.

I've had several.

The largest payout was because my boss told me in a monthly 1-2-1 that "frankly she doubted my ability to do my job because I had a small child."

This was on day three of me working for her before she'd actually asked me to do anything. Unfortunately for her, there was a witness to her bigotry, a company visitor. And it was in the week our company had publicly declared that motherhood was valued and female employees worldwide would get the same maternity rights. She tried to bully me into leaving. I went to HR, with a sworn statement from the visitor. They paid me 6 months money, mostly tax free, to leave quietly.

The most recent one. I was recruited during lock down on a fully remote contract. The company didn't have an office at the time, having let their lease lapse so it was to suit them. Recently, the CEO decided everyone had to be in central London full time, which I cannot do (school run). To fire me for not going into London every day would have been constructive dismissal so they had to buy me out of my contract. Five figure sum.

When companies cock up, break employment law or change policy, a compromise agreement is normal in my industry.

It might sound like some people have received big settlements but often the sum is made up of things like pay for notice period and holiday.
We had a staff member who left by mutual agreement and had a settlement - approximately 60% of that payment was made up of statutory things like notice pay. I can imagine some people might have thought they did well but really they only had about 10k in actual extra money IYSWIM. They were a bad fit for our team and caused considerable problems. It was worth the money to get rid and we have had a very stable team since.