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  • Episode 9: Will I have to Pay Tax on my Settlement Payment?

    Episode 9: Will I have to Pay Tax on my Settlement Payment?
    2024/09/28
    Received a settlement agreement? Email geoffrey@settlementsolicitor.uk or call 0800 061 4816 for a free, fast, confidential service.The Settlement Agreement Solicitor Episode 9: Will I Have to Pay Tax on My Settlement Payment? Hello, and welcome to The Settlement Agreement Solicitor Podcast. I am Geoffrey Caesar, a solicitor of England and Wales with over 20 years of experience specialising in settlement agreements. Whether negotiating your first settlement or navigating a more complex situation, you are in the right place. In this episode, I am tackling one of the most common, and often most confusing, questions that come up when dealing with settlement agreements:Will I have to pay tax on my settlement payment? The answer is, it depends. Let’s dive in and break it down into simple terms, while also digging into the legal nitty-gritty of UK tax law, which is where I step in as your trusted solicitor to guide you. First things first, it is important to understand that not all payments you receive under a settlement agreement are treated the same way for tax purposes. Some will be taxable, and others may be entirely tax-free, up to a certain limit. The £30,000 Tax-Free Allowance – What Is It? Let’s start with the good news. Under UK tax law, certain payments made under a settlement agreement are tax-free up to £30,000. This is often referred to as the “£30,000 exemption.” But, we need to understand which payments qualify for this tax-free treatment. Here’s the key distinction you need to keep in mind: Payments that arise out of your employment contract are subject to tax and National Insurance contributions (NICs), just like your regular salary.Payments made as compensation for the termination of your employment are potentially tax-free, up to £30,000. Let’s explore that a bit further. Contractual Payments – Taxable Any payment that is owed to you under your employment contract is considered taxable. This includes things like: Unpaid salary: Anything you’re owed up to your last day of work is treated as earnings.Holiday pay: If you have accrued holiday that hasn’t been taken, this will be subject to tax and NICs.Bonuses or commissions: If your contract entitles you to a bonus or commission payment, these are also fully taxable.Payments in lieu of notice (PILON): If your employment contract includes a clause that allows your employer to pay you instead of having you work out your notice period, this too will be taxed like regular earnings. In HMRC’s eyes, these are essentially payments for work done or for rights you have under your contract, and they’ll tax it accordingly. Non-Contractual Payments – Potentially Tax-Free Now, here’s where it gets interesting. If your employer is compensating you for the termination of your employment, that’s a non-contractual payment, and it may be tax-free up to £30,000. This is commonly referred to as a termination payment. Here are a few examples of payments that could fall under this category: Redundancy payments: Whether you’re getting a statutory redundancy payment or an enhanced redundancy payment, this can be tax-free up to the £30,000 limit. Ex-gratia payments: These are payments made at your employer’s discretion, often as a gesture of goodwill or to help facilitate the settlement. As long as they are not owed to you under your contract, these, too, fall within the £30,000 tax-free limit. Compensation for loss of employment: If your settlement agreement includes a lump sum to compensate for the loss of your job, this payment is not tied to your employment contract and can be tax-free up to £30,000. When Payments Exceed the £30,000 Tax-Free Limit So, what happens if your non-contractual termination payments exceed £30,000? Well, any amount over the £30,000 threshold is subject to income tax but not National Insurance contributions. Let’s break that down with an example:Imagine you’ve been offered a settlement payment of £50,000. Of that, £30,000 could be tax-free. The remaining £20,000, however, will be subject to income tax at your normal tax rate. So, if you’re in the 20% tax bracket, you’d pay £4,000 in tax on that excess. What About PILON Payments Without a Contract Clause? A quick word on Payments in Lieu of Notice (PILON): If your contract doesn’t include a PILON clause but your employer still chooses to make a payment instead of having you serve your notice, that payment used to benefit from more favourable tax treatment. However, since April 2018, these payments are taxable regardless of whether they are contractual or not. I will cover this in more detail in a separate episode. Other Tax Considerations Beyond income tax, there are a couple of other considerations. For example, some benefits in kind, such as continuing to receive your company car or health insurance, may be subject to tax. And in cases where compensation is being paid for injury or discrimination ...
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    9 分
  • Episode 8: I have Received a Settlement Agreement. What do I do next?

    Episode 8: I have Received a Settlement Agreement. What do I do next?
    2024/09/28
    The Settlement Agreement Solicitor Episode 8 – I Have Received a Settlement Agreement, What Do I Do Next?Hello, and welcome back to The Settlement Agreement Solicitor. In this podcast, we break down everything you need to know about settlement agreements, helping you make informed decisions about your employment rights. I am your host, Geoffrey Caesar, solicitor of England and Wales, with over 20 years of experience advising employees on their settlement agreements. Today’s episode is one of the most practical ones yet, because we’re answering a question I get asked all the time: “I’ve just received a settlement agreement, what do I do next?” The very first thing—and I cannot stress this enough—is contact me. You need a solicitor on your side, and that’s exactly where I come in. I will take care of the legal side of things so you don’t have to worry. But before we dive into what you should do next, let’s take a step back and talk about what a settlement agreement is. In short, a settlement agreement is a legally binding contract between you and your employer. It usually outlines the terms of your departure from the company, including what you’ll receive in exchange for agreeing not to make any future claims against your employer. This can cover anything from compensation, confidentiality, references, and more. So, you’ve been handed this document, and you might be wondering: What now? 1. Contact me immediately The very first thing you should do is get in touch with me, Geoffrey Caesar, to act as your solicitor. By law, you’re required to seek independent legal advice before signing a settlement agreement. That is where I come in. I will review the agreement, explain what it means in plain English, and make sure that it works in your best interests. I will ensure that everything’s in order—whether it’s the compensation, notice period, or any restrictive covenants—and that you’re not leaving anything on the table. If necessary, I can also negotiate with your employer to improve the terms. Once we are happy with the agreement, I will provide you with the legal adviser letter or certificate that employers often require to evidence that you have received the requisite legal advice. You won’t have to pay me anything. Typically, the settlement agreement will include a provision for your legal fees, meaning your employer will cover the costs of my services. I will work within those agreed fees, and you don’t have to worry about any unexpected charges. All the legal support you need, at no cost to you. 2. Understand the deadlines Settlement agreements often come with tight deadlines, so time is of the essence. Your employer will usually give you a window in which to consider the agreement—typically 10 days but sometimes a faster turnaround is demanded. This is why you need to engage a solicitor like me as soon as possible. The quicker we get started, the more time we have to properly review and negotiate the terms. Do not rush into signing just to meet a deadline, though. It’s essential that the agreement is right for you. I’ll make sure we use the time wisely, and if needed, I can negotiate for an extension on the deadline. 3. Do not feel pressured Sometimes, when an employee receives a settlement agreement, they feel pressure to sign it immediately, whether it’s from HR, their line manager, or just the stress of the situation. But remember, you have rights. It’s your decision, and it’s essential that you fully understand what you’re agreeing to before you sign anything. Take a deep breath, and don’t rush into it. With my help, we’ll navigate the process together and ensure you’re fully protected. 4. Do not discuss the settlement It can be tempting to talk to your colleagues or friends about the settlement agreement, but keep in mind that most agreements include strict confidentiality clauses. Breaching these could potentially result in the offer being withdrawn or reduced. So, keep the details between yourself, your employer, and—most importantly—me, your solicitor. 5. Think about the long-term While the financial sum might catch your eye, there are other aspects of the agreement you need to consider, especially the long-term implications. For example, does the agreement include restrictive covenants that could limit your future job prospects? Will you receive an agreed reference to protect your reputation? I will look at these factors with you to ensure that every element of the settlement agreement suits your personal and professional goals. 6. Consider the terms carefully In addition to the compensation, I will review the non-financial terms. These include things like confidentiality, references, non-disparagement clauses, and more. Every clause is important, and I will make sure the terms are fair and reasonable. Final Thoughts To recap: Contact me immediately upon receiving a settlement agreement. I...
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    7 分
  • Episode 7: Non-Financial Benefits in a Settlement Agreement

    Episode 7: Non-Financial Benefits in a Settlement Agreement
    2024/09/27
    The Settlement Agreement Solicitor Episode 7 – Non-Financial Benefits in a Settlement Agreement Welcome back to The Settlement Agreement Solicitor, the podcast where I, Geoffrey Caesar, guide you through the ins and outs of settlement agreements with the benefit of over 20 years’ experience as a solicitor of England and Wales specialising in settlement agreements. In this episode, Episode 7, we will be talking about non-financial benefits that can be included in a settlement agreement.When most people think of settlement agreements, the first thing that comes to mind is, of course, the compensation—how much am I getting, and how will it be paid? But what many do not realise is that settlement agreements can include a variety of non-financial benefits. Depending on your situation, these additional terms can be just as valuable, if not more so. Let's dive into a few examples. 1. Agreed Reference One of the most common non-financial elements is an agreed reference. After leaving a job, especially in contentious circumstances, your future job prospects might be one of your biggest concerns. An agreed reference can be an important way to control the narrative about your departure. It is a pre-written document that outlines what your former employer will say if a prospective employer calls for a reference. This is vital in safeguarding your reputation and ensuring that nothing damaging or unfair gets said in future employment checks. 2. Confidentiality Clauses Most settlement agreements will include some form of confidentiality clause, where both sides agree not to discuss the terms of the agreement or, in some cases, the fact that a settlement has even been reached. While this might seem like it mainly benefits the employer, it can also be highly beneficial to the employee. If the circumstances of your departure are sensitive, a confidentiality clause can protect your reputation and give you peace of mind that your former employer won’t disclose the situation. 3. Non-Disparagement Clauses Closely linked to confidentiality is a non-disparagement clause. This is an agreement where both parties promise not to bad-mouth each other publicly. For employees, this can be a particularly useful safeguard against any negative comments or reputational damage after you leave. Think of it as a bit of extra protection to ensure no one’s talking about you in a way that could harm your future career. 4. Return of Property and Retention of Benefits You might also see terms about the return of company property. But, in some cases, there can be negotiation around retaining certain benefits. For example, if you had a company car, the agreement might allow you to keep it for a period of time after your employment ends. Similarly, things like private healthcare, life insurance, or gym memberships may be extended for a period as part of the settlement. 5. Outplacement Support Outplacement support is another powerful non-financial benefit, especially if you’re concerned about finding a new job. This could involve your employer covering the costs of career coaching, CV writing services, or even retraining. It’s a way to help you transition smoothly into your next role, which can be invaluable when you’re at a crossroads in your career. 6. Apology or Statement of Regret This next one might surprise you, but some people negotiate for an apology or a statement of regret from their employer. It’s not common, but in some cases, especially where workplace mistreatment or miscommunication is involved, getting a formal apology can provide emotional closure. It won’t be for everyone, but for some, it can be an important part of moving forward. 7. Mutual Agreement on Public Statements Lastly, public statements, particularly for more senior employees or those in public-facing roles. Negotiating a mutually agreed press release or public announcement about your departure is possible. This can help manage how your exit is perceived by the outside world, giving you control over the message that’s put out there.As you can see, settlement agreements aren’t just about the financial payout. Non-financial benefits can be just as crucial, particularly when it comes to your reputation, future career prospects, and personal peace of mind. When negotiating a settlement, always remember that it’s not just about what you’re walking away with monetarily but how you’re positioning yourself for the future. A well-crafted settlement agreement can protect your interests long after your departure from the company. And that wraps up today’s episode. I hope you found this dive into non-financial benefits helpful. As always, if you’re dealing with a settlement agreement or just have questions, feel free to reach out to me, Geoffrey Caesar, your go-to expert on settlement agreements.
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    6 分
  • Episode 6: What type of Payment is Typically Included in a Settlement Agreement?

    Episode 6: What type of Payment is Typically Included in a Settlement Agreement?
    2024/09/25
    The Settlement Agreement Solicitor Episode 6: What Types of Payments Are Typically Included in a Settlement Agreement? Hello and welcome back to The Settlement Agreement Solicitor, the podcast that takes you through the ins and outs of settlement agreements with clarity, guidance, and a bit of common sense. I’m your host, Geoffrey Caesar, a solicitor with over 20 years of experience helping clients negotiate and understand these often-complex legal documents. Today, in Episode 6, we are tackling a question at the heart of most settlement agreements: What types of payments are typically included in a settlement agreement? Whether you are considering signing one or you are right in the thick of negotiations, understanding the payments you’re entitled to—and ensuring that they’re fair—is absolutely critical. So, we are going to walk through each type of payment you might encounter, and I will also provide some practical tips to ensure you don’t miss out on anything. Let’s get into it. 1. Your Regular Pay Up to the End of Your Employment Let’s start with something that might seem straightforward but is often an overlooked detail: your regular pay. This includes any salary, wages, holiday pay, or benefits you’re entitled to up to your official end date. This must be clearly spelled out in your agreement. One point to check is whether you are still on the payroll during a notice period or continuing to accrue holiday pay or pension contributions. These small details can add up, and it’s worth clarifying exactly what your entitlement is, especially if you are expected to remain “on garden leave” until your final day. If you have taken any accrued holiday that exceeds your entitlement, the company may deduct that from your final payment, which is another thing to watch out for. But remember, the core of this section is simple: make sure you are paid what you are owed. 2. Payment in Lieu of Notice (PILON) Next, we have Payment in Lieu of Notice, or PILON, as it is often abbreviated. PILON can be a very useful tool, especially if you and your employer want to avoid a long, drawn-out exit. But how does it work? Instead of requiring you to work through your notice period, your employer pays you what you would have earned had you worked. Simple, right? Well, not always. Make sure you know whether PILON is in your contract. Some contracts include it as an option for the employer, but others might not. If it’s not included in your contract, your employer could be in breach of contract by paying PILON without agreement, which means you may be entitled to more compensation. PILON is usually subject to tax and National Insurance deductions, unlike certain termination payments we shall discuss in a moment. It is important to ensure that this has been calculated properly and that you’re not losing out through incorrect deductions. If your contract of employment does not contain a PILON clause then, if your employer requires you to not work your notice period, the payment they make instead of you working your notice period is effectively a payment for breach of contract, which means that the first £30,000 can be paid free of tax and national insurance deductions. This brings us onto the third type of payment. 3. Termination Payments: Ex Gratia and More Now, let’s move on to one of the most crucial components of any settlement agreement—the termination payment. This is the lump sum that many employees focus on, and for good reason. It is often the most significant payment you will receive as part of the settlement. One key term here is ex gratia, meaning ‘out of goodwill’. Ex gratia payments are discretionary payments made by your employer, usually to compensate you for the loss of your job. These payments are often seen as a goodwill gesture to smooth the transition out of the company. Here is where it gets interesting. Termination payments, including ex gratia sums, can often be paid tax-free up to £30,000 in the UK. This is a real advantage, as you can receive a significant lump sum without tax being deducted, provided the payment is structured correctly. But remember, any amount over £30,000 will be subject to tax, so it’s vital to check how that is calculated. If your agreement refers to "compensation for loss of employment," ensure the amount is clear. I have seen agreements that do not adequately specify the breakdown, leading to later confusion. Clarity is key. Never be afraid to ask your employer for a full breakdown of the figures. 4. Bonuses, Shares, and Long-Term Incentive Plans (LTIPs) Next, we come to bonuses, shares, and long-term incentive plans—often the most complex part of any settlement agreement, especially for senior employees or those in sectors with a performance-based pay structure. Let’s start with bonuses. If you’ve earned a bonus or are partway through a bonus year, it’s essential to negotiate how this will be handled...
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    10 分
  • Episode 5: How Much Money Will I Receive Under a Settlement Agreement?

    Episode 5: How Much Money Will I Receive Under a Settlement Agreement?
    2024/09/24
    The Settlement Agreement Solicitor Episode 5 How much money will I receive under a settlement agreement? Welcome to the Settlement Agreements solicitor podcast, your go-to resource for everything related to settlement agreements in the workplace. I'm your host, Geoffrey Caesar. a solicitor of England and Wales with over 20 years of experience specialising in settlement agreements. Today we're diving into one of the most frequently asked questions. How much money will I receive under a settlement agreement? Before we get into the nuts and bolts, it is essential to understand that settlement agreements are unique. There is no one-size-fits-all answer regarding how much money you'll receive. Several factors come into play, and while there's no exact science to it, I will walk you through the key elements typically considered when calculating your settlement amount. 1. Statutory redundancy payIf you've been dismissed by reason of redundancy, you're likely entitled to statutory redundancy pay which forms the foundation of most settlement agreements where redundancy is involved. The calculation is based on three factors, your age, your length of service, and your weekly pay capped at a statutory limit. In general, you will receive one and a half weeks pay for each full year of service over the age of 41, one week's pay for each year of full service between the ages of 22 and 40, half a week's pay for each full year under the age of 22. Now, this is the legal minimum, but many employers offer more in the context of a settlement agreement. Some offer enhanced redundancy packages to incentivise an amicable departure and avoid potential legal disputes. 2. Pay in lieu of notice, also referred to as PILONAnother important component of settlement agreements is pay in lieu of notice. or PILON. If your employer is terminating your employment immediately, they might include a payment equivalent to your contractual notice period rather than requiring you to work your notice. For example, if your contract stipulates a three-month notice period but your employer doesn't want you to work that period, they'll include an additional three months' pay under the settlement agreement. Depending on how it is structured, this might be taxable, but careful drafting of the agreement can sometimes reduce the tax burden. 3. Compensation for loss of officeA big part of any settlement agreement is the compensation for loss of office. This is where things can get a bit more fluid. This payment compensates you for the fact that your employment is ending abruptly and without you resigning. Several factors influence this figure. Firstly, length of service. The longer you've been with the company, the higher the compensation is likely to be. Secondly, current salary and benefits. This includes things like bonuses, commissions, car allowances or pension contributions. Thirdly, likelihood of finding a new job. If it's a tough job market or your specific industry has few opportunities, you may be able to negotiate a higher payment to cover the time it will take you to find new employment. Generally speaking, most employers aim to offer between one to six months salary as compensation, but this can vary significantly depending on your circumstances. the risks involved for the employer and the strength of any potential claims you might have against them. 4. Compensation for Employment Claims If there's a risk that you could pursue legal claims against your employer, particularly claims of unfair dismissal, discrimination or whistleblowing, your settlement agreement might reflect this risk. Employers are typically keen to avoid legal disputes, which can be costly and damaging to their reputation. The value of any potential claim, however, will depend on factors such as... Firstly, the strength of the claim, how strong your legal arguments are. Secondly, losses incurred. This includes loss of salary, bonus, or career progression opportunities. Thirdly, impact on your mental or physical health. This could increase the overall settlement figure if you've suffered from stress or ill health as a result of your employer's actions. The stronger your potential claims, the more leverage you have in negotiating a higher settlement figure. 5. Other elementsLet's not forget the non-monetary benefits that can also be negotiated as part of your settlement agreement. For example, references. Securing a positive reference can be crucial for your future job prospects. Tax treatment. Some parts of your settlement may be tax-free, such as the first £30,000 of a compensation for loss of office. So structuring the payment in a tax-efficient way is often an important part of negotiations. How the settlement amount is typically arrived at.How do we bring all of these elements together? Well, negotiations typically begin with the statutory redundancy pay and a PILON, as the baseline. Then, compensation for loss of office is added to reflect the financial and emotional ...
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    8 分
  • Episode 4: Is a Settlement Agreement the Right Option for You?

    Episode 4: Is a Settlement Agreement the Right Option for You?
    2024/09/23
    The Settlement Agreement Solicitor Episode 4: Is a Settlement Agreement the Right Option for You? Hello and welcome back to the Settlement Agreement Solicitor podcast. your go-to source for everything you need to know about settlement agreements, employee rights and navigating employment disputes with confidence. I'm your host, Geoffrey Caesar, a solicitor of England and Wales specialising in settlement agreements. Today we're diving into a question I get asked all the time. When is a settlement agreement the right way to go? Whether you're an employee considering your options after being offered a settlement, or an employer looking for a fair way to resolve a workplace dispute, this episode is for you. We'll discuss the benefits of settlement agreements, especially when compared to the often lengthy and stressful process of taking a claim to an employment tribunal. Let's start with the basics. A settlement agreement is a legally binding document where both the employer and the employee agree to end their working relationship on specific terms. These agreements usually include some form of compensation for the employee in exchange for waiving their right to bring claims against the employer. Now, why might a settlement agreement be a good option? Let's talk about speed. One of the biggest draws of a settlement agreement is how quickly it can resolve a dispute. Let's say you've been unfairly dismissed or face a redundancy. You can spend months, even years, battling your employer in an employment tribunal. Employment tribunal cases can be drawn out and it can take several months just to get a hearing date. A settlement agreement, on the other hand, can be negotiated and signed off within a matter of weeks, sometimes even days if both parties are motivated. The speed of resolution allows you to move on both financially and emotionally without the stress of a long legal battle hanging over you. Let's put it into perspective. The average employment tribunal takes about 12 to 24 months, depending on the complexity of the case. And that's before you even factor in potential delays, adjournments and the possibility of an appeal. In contrast, if you and your employer are on the same page, a settlement agreement can be sorted out in less than a month. Time is precious, and sometimes the certainty of a settlement agreement is worth much more than the gamble of an extended tribunal claim. Speaking of certainty, that is another major plus. When you agree to settle, you know exactly what you're getting. You and your employer sit down, hash out the terms, and everyone knows where they stand. Compare that to an employment tribunal, where the outcome is unpredictable. You might win big. But you might also walk away empty-handed or worse, lose and end up with legal bills to pay with no upside to you. With a settlement agreement, there's no risk of an all-or-nothing verdict. You're in control of the negotiation. You can agree on compensation, terms like a reference and even confidentiality clauses that protect your reputation moving forward. Employment disputes are stressful. It's emotionally draining to relive difficult work experiences and argue your case in a courtroom setting. Settlement agreements Remove that pressure. The process is typically done through negotiations, sometimes directly between the parties or often through solicitors like me who can represent your interests calmly and efficiently. This is a much less confrontational approach than going through a public tribunal where everything is scrutinised. The negotiations in the settlement agreement are private and the final deal is confidential. That means both you and your employer can keep things low key and avoid the spotlight. Here's another reason why settlement agreements are often a good idea. The financial package on offer. Employers usually sweeten the deal with a cash payment, making it attractive to just sign on the dotted line and move on. This can include compensation for loss of employment, payment for notice periods, and in some cases, a tax-free sum. Many people think that they might get more at a tribunal, but it's important to remember there is no guarantee to this. Even if you win, it's possible that the compensation might not cover your legal costs or the emotional toll of the fight. In contrast, a well-negotiated settlement agreement can offer you a lump sum now, giving you financial stability and allowing you to focus on your next steps. Unlike a tribunal decision which is imposed on both parties, a settlement agreement can be crafted to suit your specific situation. You might want a positive reference. Or maybe you want a clause that keeps the details of the agreement confidential. All of that can be written into the deal, giving you a level of control and personalisation that a tribunal process can't match. So when might a settlement agreement be a good option? Here's the simple answer: if you want a quicker, less ...
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    7 分
  • Episode 3: Where Can I Get Independent Legal Advice About My Settlement Agreement?

    Episode 3: Where Can I Get Independent Legal Advice About My Settlement Agreement?
    2024/09/21
    Received a settlement agreement? Email geoffrey@settlementsolicitor.uk or call 07595 884 661 for a free, fast, confidential service.The Settlement Agreement SolicitorEpisode 3. Where can I get independent legal advice about my settlement agreement? Hello and welcome back to the Settlement Agreement Solicitor, the podcast where we break down everything you need to know about settlement agreements and help you navigate the intricacies of employment law with confidence. I am Geoffrey Caesar, and today I am tackling an essential question: where can I get independent legal advice about my settlement agreement? If you're an employee facing a settlement agreement, you might feel a bit unsure about what steps to take. The good news is, by law, your employer is required to ensure that you receive independent legal advice before the agreement becomes binding. But not all advice is created equal, and today I'm going to explain why getting advice from a solicitor who specialises in settlement agreements might just be one of the best decisions you can make. Why independent legal advice is essentialLet's start with the basics. For a settlement agreement to be legally binding, the law requires that you, as the employee, receive independent legal advice about the terms and effect of the agreement. Why is this necessary? Simply put, a settlement agreement often involves you giving up significant employment rights. particularly the right to bring any future claims against your employer. So, ensuring you fully understand what you're signing away is critical. It is not enough to receive advice from just anyone. The law defines exactly who can provide this advice, and you have to choose carefully. While trade union advisers, voluntary sector advisers and even some legal executives are authorised to act in this capacity, I strongly recommend opting for a solicitor who specialises in settlement agreements. Let's explore why. Firstly, let's take a look at who can advise you. Under the law, there are several categories of professionals who can provide independent advice. Let me briefly run through them:1. Qualified lawyers. This includes solicitors or barristers who hold practising certificates and are authorised to conduct litigation or appear in court. They are the most common and generally the most comprehensive source of advice. 2. Trade union advisers. If you're a union member, there may be officers within your union who are certified to provide advice. 3. Voluntary sector advisors. These can include individuals working at advice centres who are certified to provide legal advice so long as you are not paying them for it. 4. Others, such as chartered legal executives. Some legal executives employed by regulated law firms can also provide advice, but their role can be more limited. Now, while these options may sound varied, not all advisors are equal when it comes to expertise. Here's why choosing a solicitor, specifically one who specialises in settlement agreements, can make a world of difference. Why choose a specialist solicitor? First and foremost, settlement agreements are legal documents, and not just any legal document, but one that could affect your ability to bring future claims, secure compensation, and protect your reputation. The terms and conditions of these agreements can be complex, and there's often little room for error. A solicitor who focuses specifically on settlement agreements will have the in-depth knowledge to spot issues that a general advisor might miss. Here's why you should seriously consider going with a solicitor, particularly one with expertise in this field. 1. Expertise in employment law. While a trade union advisor or a voluntary sector worker might be able to explain the basics, a solicitor who specialises in settlement agreements will bring a much deeper understanding of employment law. They will have seen countless agreements, negotiated with all kinds of employers, and know how to identify potential pitfalls or opportunities to improve your outcome. In my experience, specialist solicitors are often able to spot ambiguities or unfavourable clauses in the agreement that others might overlook. Whether it's identifying overly restrictive confidentiality clauses, unfair non-compete provisions, or a need to clarify the settlement sum, you want someone in your corner who's dealt with these exact issues before. 2. Tailored negotiation skills. A settlement agreement is not always set in stone. Yes, the document you receive may look final, but an experienced solicitor can often negotiate a better deal on your behalf. This could include securing a higher financial settlement, extending your notice period, or adding favourable references into the agreement, things that go beyond simply understanding the document. Specialist solicitors know what is reasonable to ask for and can push back against terms that aren't in your best interests. They can understand the nuances of the employer-employee ...
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    11 分
  • Episode 2: What is a Settlement Agreement?

    Episode 2: What is a Settlement Agreement?
    2024/09/19
    Received a settlement agreement? Email geoffrey@settlementsolicitor.uk or call 07595 884 661 for a free, fast, confidential service.The Settlement Agreement SolicitorEpisode 2: What is a Settlement Agreement? Welcome to the Settlement Agreement Solicitor podcast, your go-to guide for everything you need to know about settlement agreements. I am Geoffrey Caesar, a solicitor with over 20 years of experience with settlement agreements. In this episode, I answer the question, what is a settlement agreement? Whether you're an employee or an employer, this is a term you may well need to understand. So let's break it down. What is a settlement agreement? A settlement agreement is a legally binding contract between an employer and an employee. Under a settlement agreement, the employee agrees to waive their rights to bring certain legal claims against the employer, and usually there's a financial settlement involved. Think of it like a clean break. Both parties walk away with a clear understanding of the terms and the employee gets compensated in some way, usually financially. You may have heard the term ‘compromise agreement’ in the past, and it might still slip into usage today. Compromise agreements were rebranded to ‘settlement agreements’ back in 2013. This change was made thanks to the Enterprise and Regulatory Reform Act 2013. Why the switch? Officially, it was to make things clearer and more accessible. I suspect it had more to do with the negative connotations of the word ‘compromise’. Successive governments have preferred that employees and employers settle their differences without recourse to the employment tribunal. So, switching from compromise to settlement was most likely an attempt to encourage more parties down that route. Key features you should knowNow let's discuss the key features that distinguish a settlement agreement from any other type of agreement or contract. Firstly, waiver of claims. The employee gives up their right to bring claims such as unfair dismissal, discrimination or breach of contract. Secondly, financial compensation. The employee usually receives a financial payout. How much? That depends on the situation. Thirdly, legal advice. For the agreement to be effective, the employee must get independent legal advice. That's where people like me come in. Fourthly, confidentiality. Have you ever wondered why people don't talk about these agreements? That's because they often include confidentiality clauses which prevent either party from mentioning the existence of the settlement agreement let alone revealing any of the terms of the agreement, subject to very tight exceptions, such as discussing it with your solicitor, your partner, or your tax advisor. I hasten to add that I have not listed those people in order of importance!Fifthly, mutual agreement. No one can be forced to accept a settlement agreement. Both parties must agree to it voluntarily. The legal stuffOf course, there is legislation and case law behind all of this. The Employment Rights Act 1996 and the Equality Act 2010 are the most significant acts of Parliament to be aware of, but there are many more pieces of legislation which determine what rights can and cannot be waived under a settlement agreement. Case law has clarified some points of ambiguity over the years and led to the emergence of the fairly standard format of settlement agreements that we see today. However, be aware that there are still a lot of different forms of settlement agreements. For example, some might be a few pages long, whereas others can run to dozens of pages. Any solicitor specialising in this area of law, like I do, must have an in-depth and comprehensive knowledge of the entire field of employment law. Only use a solicitor specialising in employment law to review and advise you on your settlement agreement. Section 203 of the Employment Rights Act 1996 is the single most important piece of legislation for forming a legally binding settlement agreement. It says that you can contract out of employment rights, which is another way of saying that the employee can waive their rights to bring specific claims against their employer, but only if certain conditions are met. And that's where settlement agreements come in. What makes a settlement agreement valid? There are six key ingredients to making a settlement agreement valid. 1. The agreement must be in writing. 2. The agreement must relate to proceedings whether actual or potential which must be identified in the agreement. 3. The employee must obtain advice from a relevant independent advisor. 4. The settlement agreement must name the relevant independent advisor. 5. The relevant independent advisor must have insurance in place to cover the risk of an employee's claim when giving advice. 6. The agreement must reference that the statutory conditions regulating settlement agreements under the Employment Rights Act 1996 have been met. The term relevant ...
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