Settlement Agreement work

[hiphopapotamuses]

I've NC as I post quite a bit and this could be outing to those that know the situation. I'll be a bit vague too, sorry!

There's been some discrimination toward me at work and I have been offered a settlement agreement. I've spoken to a solicitor (prior to the proposed offer) who advised that a tribunal would be costly but I "arguably have a case" although as my issue hasn't resulted in a loss of earnings it'd be a bit of a gamble. So with that advice in mind I raised a grievance which has now got to the point of agreement. This has affected me a lot and I just want it over with.

The company have told me I must indicate that I accept in principle then engage a solicitor (for which they will pay and have set a sum for that) at which point a formal offer will be issued and it'll all become legally binding. Is this correct or should I engage a solicitor to review before I indicate any acceptance? I don't actually mind paying towards it myself.

The agreement is roughly 12 weeks salary and a reference (I think I have approval over the content). Is there anything else I should request, for example they pay for my phone and allow it to be used for personal reasons, should that get worked in somehow, maybe offer a discounted price for me to buy the handset and them get the PAC code to transfer my number to my new provider? Should I stipulate how my leaving is to be communicated to the company (though I care not about that, I'll never work with them again)?

I don't want to be mercenary - it's not necessarily about trying to get more money out of them; but they've really fucked me over and set my career back a fair bit and been gaslighty twats until I provided incontrovertible evidence to the contrary. Consequently, I don't want to walk away from the deal feeling like I've been had just because I've fought hard to get here and the thought of challenging them further makes me want to vomit.
I will speak to the solicitor again on Monday but that feels like a long way away, can anyone advise in the meantime? What would you think of to include in an agreement?
Thanks

Well...it is not going to be in any way binding until you have a lawyer to sign it off. And if you put something in front of your solicitor that they review and don't like / think you should challenge, then you just won't sign it.
So I don't see an issue in saying that on a "without prejudice and subject to contract" basis, you do accept their offer in principle.

You should get clarity on how your notice period will be treated - although as it's contractual, you won't get any tax advantage, but they should confirm your actual termination date, whether you get PILON or are on garden leave etc. That would take care of the benefits issue.

Reference, severance terms, notice, contribution to legal fees and any post termination restrictions are the chief issues to cover off

Hope that helps

Agree what your reference will say too

Settlement agreements are reasonably standard. Your solicitor will review and tell you if it is reasonable. 12 weeks is not great but if you have an entry level job and no substantial notice period you might not get much more at tribunal. Get proper legal advice.

I don't have an entry level job, I'm fairly senior. I don't have a substantial notice period though.

@framboisier thanks, that is really helpful.

It is standard practice and required by law that for the employment compromise agreement to be legally binding you must have your own solicitor to look over it (and often the employer will pay some or all the fees to a set amount in the agreement e.g. £500). That solicitor will act for you in your interests and will tell you if it is reasonable to accept the amount. The fact the employer after the work is done will pay their bill does not change things so it is very safe. You can use your own solicitor.

I would not bother with the phone if i were you as it will just complicate things but if you want to try add a bit more to the amount and make sure the amount they agree to pay your solicitor is going to be enough. They probably won't want anything complicated and on-going such as the phone and transfer of numbers etc.

Usually there will not be a clause about how the company tells your coworkers about your departure but you could certainily put that in if you want to.and they agree - eg "if asked (by suppliers, customers, other employees) the employer will say the employee has left to seek opportunities elsewhere" or something neutral like that.

Topic of the year seems to be if the usual secrecy clause which is in just about every settlement ever to protect both sides should be used if you have been the victim of a sex pest. You probably didn't have a crime against you so probably agreeing the employer and you will keep this secret is not an issue. The other issue is I think the tax rules have just changed in relation to employement pay offs - as ever the Government wants more tax so do check that carefully. It is not my area but whenever I look at it iit looks very complicated. See www.gov.uk/government/news/new-rules-for-taxation-of-termination-payments which the Government seem to have updated at end of November 18.

Make sure you cover any accrued holiday pay and any other money they owe you and that the end date of your employment is clear and you will get your P45.

12 weeks is crap. How long will it take to get another post? I’d be looking to up this.

Thanks @xenia
The money they're offering is under the 30k threshold for tax so I think ok? It's not a sex pest thing and what they've done is very definitely illegal!
@OKhitmewithit I actually have another job offer on slightly more money than I was paid at this company so I'm not too concerned.

That’s great news, that helps the stress. Good luck

Definitely!!! I've barely slept for weeks so that job offer was a huge relief. Otherwise, yes. Not sure 3 months would be enough for me to live on as recruiting usually takes a good few weeks (I think I've just stumbled across an employer that's very eager!)

A new job at higher pay sounds good.
The under £320k is tax free is the bit I thought had changed in some cases so just perhaps put a clause in the agreement that expressly says what is being paid tax free -ask the solicitor to make sure it 's clear in the document.

Pilon isn’t tax free anymore, only actual compensation. 12 weeks isn’t great but if you have another job, you don’t have any losses to claim. Good luck with it all.

I think you've had a name-change fail there, OP. If you want to keep it going, message MNHQ and they'll sort it for you.

Well spotted @Lougle - reported. Thank you!

I actually have another job offer on slightly more money than I was paid at this company so I'm not too concerned.

Have you checked that this is allowed in the draft settlement agreement or have you not had a first draft yet? It's not uncommon for settlement agreements to include a clause that at the time of signing that if the employee has another job offer the termination payment is void i,e. this could lose you the 12 weeks money. If you have this clause included, you could ask to have it removed but there is a risk this would draw attention to it. My employment lawyer said some people take the risk and sign the agreement knowing their former employer could come after them for the money and some ask to have it removed and hope the request doesn't raise a red flag.

Make sure you read your draft agreement asap so you know if this is a potential issue. I had a verbal job offer but luckily the written offer took forever to come through so I pushed through finalising the settlement agreement asap so I wasn't technically 'under offer' at the time of signing. It made negotiating harder though as I didn't have the time to push hard for a better deal as I risked losing the lost when my written offer came through.

Thanks, there's no mention of that type of clause in the offer letter but I'll definitely keep a look out for it in the contract.

Good points and my £320k is obviously meant to be £30k above.

What sometimes these agreements do is remind people that obligations in their existing employment agreement carry on - such as a reasonable no competition clause and confidentiality. Even if they do not mention that the original clauses in your current contract that say they continue after termination will continue. Just check your new employment is allowed under the old - eg the old might say you cannot take another similar job in a 1 mile radius of your old work or that kind of thing. Contrary to popular myth lots of fair reasonable restrictive covenants are enforced by the courts particularly for senior people.

Do check out the £30k thing because under the old law I think if your contract did NOT say you could be paid in lieu of notice then you could get up to £30k tax free. Now I think the state is trying to tax all of this. if 40% of £30k is at stake it might be worth speaking to an accountant if my link to the new government advice does not make it clear. There may be some way some of it can be described in a particularly way which takes it outside of tax for at least some of the money - I'm not sure as it's not my area and I have not read the new rules.

@Xenia you're completely right re the 30k anything that would be classed as notice period so in my case 3 months and the offer is for 3 months pay) is subject to tax and NI - my offer letter explicitly states there'd be no tax and NI payable. Turns out the whole thing would be taxable.

I think it's really complicated and people can lawfully specify what particular bits of the pay off are for eg if some is a pay off because you are very sick i think there are exceptions. Basically the system that says you must have your own solicitor to check it over should mean the solicitor can advise you on that eg if changing the wording will change if it's taxed. I say all that subject to the caveat i have not studied the recent change in the rules to make sure more tax is paid than was before.

If they say it will be paid tax free you could include a clause saying that if later tax is assessed on it they will then pay that tax on top for example. That is the sort of amendment that might be possible to add in. Just make sure you aren't instructing the solicitor who advises you at the very last minute - give them a few days to have time to think about it properly.

Yes that's exactly what my solicitor said, she reviewed it and said it'd be subject to tax so we'd push for wording in the formal agreement saying they'd be liable for tax and NI but that the offer is rubbish as it stands.