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Settlement agreement

When considering settlement agreements the starting point is almost always thinking through how to structure the financial elements.

While structuring the financial elements is certainly crucial when considering settlement agreements, it’s important to delve deeper.

Supporting exiting employees and ensuring settlement agreements encourage individuals to have the confidence to flourish once they’ve left your employment doesn’t stop there.

For a comprehensive look at settlement agreements, check out this Halborns series on the topic.

Did you know, not all settlement negotiations result in a deal. So, protecting any offers you make from the earliest conversation is crucial to ensure they can’t be used against you in future litigation.

‘Without prejudice’ and ‘protected conversations’ can be used to protect exit negotiations but are often confused leaving you unknowingly exposed. Both have their uses!

Here’s what you need to know:

Protected conversations

A better label would be ‘partially protected conversations’ as they allow you to discuss an employee’s exit with them without exposing you to claims for unfair dismissal. But, all other claims are fair game!

Be aware though – even the protection in respect of unfair dismissal falls away if there’s the suggestion you’ve behaved improperly and put the employee under undue pressure. So, there’s a place for them provided there’s no risk of claims beyond unfair dismissal.

Without prejudice

There has to be a dispute in play for this protection to work (so think grievance, informal allegations etc). Assuming there’s a dispute, ‘without prejudice’ conversations protect against all claims, including discrimination and whistleblowing.

The protection falls away if there is ‘unambiguous impropriety’ on your behalf so it’s not a magic answer to everything.

Get in touch to enquire about settlement support

Take early advice

Always speak with your employment lawyer before entering into settlement discussions – if early discussions aren’t protected effectively they’re hard to unpick. We’re here to help.

In the next instalment we’ll look at strategies for creating authentic and supportive settlement offers (it’s not always about the cash!).

Click here to explore ‘Settlement series #2 – creating an interesting offer’. 

Creating an interesting settlement offer