Going to court or an employment tribunal is an expensive business, and most employers want to avoid it.
That’s why you hear of cases that are ‘settled on the court steps’.
When you make a claim against your employer, you may need to negotiate a settlement agreement (formerly called compromise agreements and still known by that name in Northern Ireland.)
This is where your employer offers you a sum of money in return for dropping the case and agreeing not to take them to court or a tribunal over the matter.
You are not obliged to accept their first offer, so you need to be prepared to enter into negotiations with them. This isn’t always easy.
- Decide the amount you realistically hope to achieve, and the minimum you would settle for.
- Add any things that are important to you but that don’t cost your employer anything, such as a written reference that will help you get a job in future.
- Add any things that are important to your employer but that don’t cost you anything, such as staying on for a smooth handover to your successor, or promising to keep the deal a secret.
- Watch out for any restrictive covenants, such as not being allowed to work for a competitor for the next year.
You have the right to do your own negotiating. This approach may be appropriate if you have a good working relationship with your employer, and they are offering a settlement that is more generous than the law allows.
If the working relationship has broken down, or your employer is acting unreasonably, the help of a specialist employment law solicitor is invaluable. (Our contact details are shown below and top right, hint, hint!)
Note that a settlement agreement is only legally binding when you have taken the advice of an independent adviser such as a solicitor or trade union representative.
Negotiation tips
Negotiation is not for the fainthearted.
Your employer – or perhaps, their lawyers – will try to screw you down to the minimum you’ll accept. That’s their job.
Even if you feel unhappy about the situation or mistreatment you’ve experienced, it’s important to maintain the upper hand by keeping emotion out of it.
Be realistic. Multiply your chance of success by the amount you’d recover. For example, if you’ve got a 50% chance of recovering £10,000, a £5,000 settlement is reasonable. Start by asking for double so they can negotiate you down to half and feel as though they’ve done well.
Include outstanding holiday pay and any other payments you’re entitled to.
If you have been discriminated against, you may be entitled to additional compensation.
Remember that the first £30,000 is tax-free – this benefits your employer as well as you.
There is a strict three-month limit for tribunal claims, so don’t let your employer delay negotiations. Stick to any deadlines you suggest.
Read the small print. Don’t rush to accept an offer just because the process can be long drawn out and painful.
Remember, you are in control. You always have the choice to accept their offer, withdraw your counter-offer, or issue a tribunal claim.
Negotiation techniques
- Ask open questions
- Listen carefully
- Paraphrase what’s said so you can check your understanding
- Use the power of silence
- Agree next steps in writing
First steps
If you have not yet left your job, submit a written grievance and start your employer’s formal procedure. This shows them you are serious.
Whenever you have the right of appeal, use it. This shows them you are strong.
Think carefully about the timing of your resignation. It’s critical! We can advise on that.
Write a ‘without prejudice’ letter or arrange a meeting. We can help with that too.
Need help?
For a FREE assessment of your claim, call 0808 168 7288 or fill in the contact form on the top right of this page.
We have already helped thousands of people to win millions of pounds in compensation.
You have a choice of ways to pay, including ‘no win, no fee’.
We will also discuss the best methods of funding your case and seek to reach a solution that best suits your needs. This can involve a “no-win, no-fee” agreement if appropriate.