Settlement Agreements
jacqueline • February 22, 2022
The pandemic has affected the labour market and many employees are either facing redundancy (because their employer is cost cutting or restructuring) or are being taken through a capability procedure for poor performance. When faced with such circumstances it is common for an employer to offer a Settlement Agreement. So, what is a Settlement Agreement?
What is a Settlement Agreement?
Settlement agreements, previously known as compromise agreements, are a legally binding written contract between an employer and an employee where the parties agree that the employee’s employment will end on mutually agreeable terms.
The employee agrees to waive their right to make a claim to an employment tribunal or court on matters that are covered in the settlement agreement. This is usually in exchange for financial payment, but can also be a non-monetary benefit, i.e. an agreed reference.
Reaching a Settlement Agreement
An employer or an employee can propose a settlement agreement. They are voluntary on both sides and neither party has to agree to enter into discussions about a settlement agreement. These discussions are normally conducted as part of a “protected conversation” or on a “without prejudice” basis.
Settlement agreements provide an alternative to the employer going through employment law procedures e.g., to avoid a redundancy consultation process or a capability procedure for poor performance which can be both time consuming and stressful for both parties.
Settlement Agreement Terms
For a settlement agreement to be legally binding the employee must seek independent legal advice. This advice can be provided by a solicitor or a trade union representative. The adviser must be clearly identified in the settlement agreement and their advice covered by insurance.
It is common for the employer to contribute towards legal fees.
Settlement Agreement Payments
Settlement agreements should contain a clear breakdown of the payments which the employer is making to the employee. It should state whether any of these payments are to be subject to tax and national insurance contributions or if they are to be paid free of tax.
Payments of up to £30,000 compensation can be paid without tax being deducted providing the payment is being made on a “ex gratia” basis. That means a payment that the employer has decided to make as compensation or for damages for breach of contract (not a payment that the employee is either legally or contractually entitled to).
Can a Settlement Agreement waive all employment rights?
By signing a settlement agreement employees sign away their rights to bring a claim in the employment tribunal or court against their employer for matters which include but are not limited to; unfair/constructive dismissal, redundancy payment, unlawful deductions of wages, breach of working time regulations, discrimination, breach of contract and some personal injury claims.
There are, however, some claims that cannot be waived even with a settlement agreement. They include:-
- personal injury, whereby the employee is unaware of the injury at the time of signing the settlement agreement;
- accrued pension rights under the pension scheme;
- failure to inform and consult under TUPE legislation;
- failure to inform and consult with appropriate representatives on collective redundancies.
What is a reaffirmation letter in a Settlement Agreement?
If upon signing a settlement agreement there is an extended period between the date of signature and the termination date, the employer may ask the employee to sign a reaffirmation letter. This will be signed by the employee either on or around the termination date. The letter itself asks the employee to confirm that the circumstances have not changed between the date of the initial signature and the termination date.
For more information on any of the above, please feel free to contact us on 01442 531021 or by email: info@barnardwebb.co.uk.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changes since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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With temperatures set to hit a sweltering 33c this week, I think we can all agree that working in a sweaty office with no air-conditioning is totally unbearable. But what are the legalities when it comes to maximum working temperatures? What is the legal maximum working temperature? Unfortunately, it is a myth that there is a specific law setting a maximum working temperature. There is no such law dictating when it is too hot to work. In offices, or similar working environments, the temperature must just be reasonable – which can obviously be somewhat arguable! What is reasonable depends on the nature of the workplace and may be different for an office compared to a cold store or workshop. There are also other factors to consider which can be more significant than air temperature, for example humidity, air velocity and radiant temperature. What are employer’s obligations when it comes to extreme working temperatures? Employers should undertake risk assessments and must comply with health and safety legislation, which includes: Keeping the temperature at a comfortable level; Providing clean and fresh air. Our practical advice for employers to ensure their staff stay as cool and comfortable as possible is as follows:- Allow staff to take regular breaks; Consider allowing staff to work from home if the office is too hot; Relax any workplace dress code if necessary, to ensure staff can wear comfortable light-weight clothing; Provide fans or portable air conditioning units if there are no centralised systems; Ensure staff have access to drinking water; Consider flexible working hours, ie. starting work earlier when it is cooler and finishing before it gets too hot; Keep window blinds down; Get them an ice-cream! What can employees do if they are finding the workplace temperature uncomfortable? If employees are finding the working conditions unbearable due to high temperatures, they should first discuss their concerns with their line manager informally. If this does not resolve the issue, then they may wish to consider raising a formal grievance. We would always advise employees against simply walking out, as this could be considered an act of misconduct. For any further advice on the contents of this blog, please feel free to contact us on 01442 531021 or by e-mail: info@barnardwebb.co.uk . The contents of this blog are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should take appropriate professional advice upon their own particular circumstances before acting on the basis of the information included in this blog.
Pregnancy and maternity discrimination was the fifth most common discrimination claim in 2020/21. The content of such claims include (but are not limited to) sham redundancies; offensive comments to pregnant employees; failure to implement flexible working options; and being overlooked for promotion. Businesses need to ensure they understand their legal obligations and the reasons why it is imperative women are supported by the business when they are pregnant, on maternity leave, or when they return to work. Employees need to understand their rights and entitlements so they can take action if discrimination occurs. We set out below some helpful guidance relating to pregnancy and maternity discrimination in the workplace. When can pregnancy and maternity discrimination occur? Pregnancy and maternity discrimination occurs where an employer treats a woman unfavourably: because of her pregnancy or because of an illness suffered by her as a result of her pregnancy (during the protected period – see below). because she is on compulsory maternity leave. because she is exercising or seeking to exercise, or has exercised or sought to exercise, the right to ordinary or additional maternity leave. What is the Protected Period? Under the Equality Act 2010 (EqA 10), the protected period is the period which starts when a woman’s pregnancy begins and ends. If the woman has the right to ordinary and additional maternity leave, the protected period will be at the end of the additional maternity leave period or (if earlier) when she returns to work after the pregnancy. If the woman does not have that right, the protected period ends at the period of two weeks beginning with the end of the pregnancy. Who is protected from pregnancy and maternity discrimination? A broad range of individuals are protected within the field of employment or occupation and vocational training. This includes employees, self-employed contractors, agency workers, partners and barristers. This means that although the right to statutory maternity leave only applies to employees, a wider class of individuals will benefit from the right not to suffer discrimination because of pregnancy or maternity. Is it possible for employers to dismiss employees who are pregnant or on maternity leave? As long as employers have valid reasons, follow thorough and fair procedures then it is potentially possible to dismiss employees who are pregnant or on maternity leave. However, we would strongly advise employers to seek appropriate legal advice prior to taking any such steps. Be mindful when dismissing an employee who is pregnant or on maternity leave that there are also separate statutory rules in the Employment Rights Act 1996 (ERA 96) protecting employees from dismissal and detriment (except in relation to pay) where the principal reason is related to pregnancy or maternity leave. Dismissals for reasons connected with pregnancy, childbirth, or statutory maternity pay are automatically unfair under s99 ERA 1996 and employees bringing such claims do not need to have worked for the 2 year qualifying period required by “ordinary” unfair dismissal claims. When does an employer discriminate on the grounds of pregnancy or maternity leave? It is unlawful for an employer to: discriminate by treating a woman unfavourably during the protected period because of her pregnancy or because of an illness she has suffered as a result of her pregnancy; or discriminate by treating a woman unfavourably because she is on compulsory maternity leave or because she is exercising or seeking to exercise, or has exercised or sought to exercise, the right to ordinary (26 weeks) or additional (52 weeks) maternity leave; or victimise a job applicant or employee because they have made or intend to make a pregnancy and maternity discrimination complaint, or because they have done or intend to do other things in connection with the EqA 10. If one employee discriminates against another, the employer will be liable unless it has taken reasonable steps to prevent such conduct from taking place. The offending employee may also be liable. If a job applicant or employee succeeds in a claim for pregnancy and maternity discrimination, an employment tribunal will generally award compensation (including a sum for injury to feelings). Whilst case law has helped to benchmark awards for injury to feelings, there is no compensation cap on such awards so the cost of discriminating an employee or job applicant could be high. Can pregnancy discrimination ever be justified? No ; since pregnancy is a uniquely female condition, any adverse treatment of a women on the grounds of pregnancy is direct discrimination on the grounds of her gender. Such treatment can never be justified. For more information, please feel free to contact us on 01442 531021 or by email: info@barnardwebb.co.uk . The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changes since this article was published. 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Common questions for employment lawyers are; "what is wrongful dismissal?" and "what is the difference between wrongful and unfair dismissal?". We give you the answers below. What is wrongful dismissal? Wrongful dismissal is a dismissal that is in breach of an employee’s contract. Some examples of breach of contract that are involved in wrongful dismissal claims are: Breach of notice, whether: o expressed (such as not letting an employee serve their full contractual notice); or o implied (such as the implied term to provide an employee with a minimum statutory notice period). Termination of a fixed-term contract before it has expired. Breach of a contractual disciplinary or redundancy procedure. What is the difference between wrongful and unfair dismissal? Wrongful dismissal is a contractual right ; one that is set out in the contract of employment. Unfair dismissal is a statutory right; under the Employment Right Act 1996. The key difference therefore between wrongful and unfair dismissal is that wrongful dismissal is a breach of contract law by the employer, not statutory law. Whereas, an unfair dismissal claim arises if the employee has been dismissed and their employer does not have a potential fair reason for justifying the dismissal under section 98 of the Employment Rights Act 1996. Can an employee claim wrongful dismissal if they have worked for a short period of time? There is no requirement for an employee to have a set period of continuous service to pursue a wrongful dismissal claim. A wrongful dismissal claim is a day 1 right. Is there a time limit for raising a claim for wrongful dismissal? Wrongful dismissal claims must be brought at an employment tribunal within three months (less a day) from the date of the employee’s termination. However, an employee who is out of time to pursue a claim in the employment tribunal could still pursue a civil action as, in the civil court, an extended six-year limitation period applies. How much compensation can be claimed for Wrongful Dismissal? If an employer wrongfully dismisses their employee, they will be liable to pay damages to put them back in the position they would have been in had the contract been terminated fairly in accordance with its terms. Therefore, damages will reflect the net value of wages and any other contractual benefits to which the employee would have been entitled had they been allowed to work out their notice. The damages recoverable in an employment tribunal for wrongful dismissal is capped at a statutory maximum of £25,000. However, if the value of the employee’s claim is worth more, there is no such cap in the civil courts and they could pursue their claim there. How can Wrongful Dismissal claims be avoided? It is prudent to have a comprehensive employment contract and disciplinary policy which details termination provisions and to ensure that they are followed upon termination of employment. For more information, please feel free to contact us on 01442 531021 or by email: info@barnardwebb.co.uk . The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changes since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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Calls to ban zero hours contracts have been renewed after research found a third of workers are given less than a week’s notice of their shifts. Trade unions criticise the increased use of zero hours contracts as a means of abusing vulnerable, low-income workers, providing no job security, rights or guaranteed income. On the other hand, businesses like the flexibility that zero hours contracts can bring to the job market. In times of economic instability, the zero hours contract has allowed businesses to offer jobs on flexible terms which suit many individuals as well as the business. ONS statistics on Zero Hour Contracts The Office for National Statistics (ONS) collects statistics on zero hour contracts and provided the following information about the types of people working on a zero hours contract: The majority are women (54.7% compared with 46.8% of those not working on a zero hours contract). They are more likely to be at the youngest end of the age range (36.0% of people are aged 16 to 24 compared with 11.4% of people not working on a zero hours contract). A large proportion are part-time workers (66.0% compared with 25.3% of those not working on a zero hours contract). Analysis by the TUC of the Labour Force Survey results released by the ONS on 15 February 2022 revealed that a higher proportion of black and ethnic minority workers are engaged on zero hours workers than white workers and repeats its call for zero hours contracts to be banned. So, what is a Zero hours contract and what are the parties obligations when entering into one? What is a "zero hours contract"? "Zero hours contract" is not a legal term. A zero hours contract is one type of contract between a business and a casual worker where the worker is engaged on an ad hoc basis with no guarantee of work from the business. What are the rules when entering into a zero hour contract? A zero hours contract means that the employer does not have to give the worker any minimum working hours and the worker does not have to take any work offered. Is the individual named in the Zero Hours Contract always a ‘worker’? As employees are entitled to greater statutory rights and protections compared to workers it is necessary to establish the employment status of an individual working under a zero hours contract. Usually, an individual working under a zero hours contract is considered to be a worker, and most businesses operate on that basis. Some businesses, however, use them on the basis that they are engaging self-employed contractors. However, this sometimes doesn't reflect the reality of the working relationship between the parties. Provided they are either workers or employees, those working under zero hours contracts are entitled to the national minimum wage (NMW) and paid holiday and rest breaks under the Working Time Regulations 1998. They are also protected against discrimination. What amount of paid holiday will a worker receive? All workers are entitled to holiday pay. People working zero hour contracts are entitled to the same annual leave as any other employee, however it is accrued in relation to the amount of time they work. A person who works full-time is legally entitled to annual leave of 5.6 weeks (including bank holidays). Workers on zero hour contracts accrue annual leave from the first day of work, just like a normal full-time employee. Workers on zero hour contracts may want to keep track of their hours and make sure they get the correct amount of annual leave and holiday pay they are entitled to. Are workers on Zero Hour Contracts entitled to rest breaks? Yes. Workers and employees on zero hour contracts are entitled to one uninterrupted rest break for twenty minutes for every six hours they work. Do workers on Zero Hour Contracts have the right to request a stable contract? An independent review was carried out by Matthew Taylor and resulted in the Good Work Review. This review investigated modern ways of working, including the use of zero hours contracts. Subsequently, the government’s ‘Good Work Plan’ was released in December 2018 and confirmed that legislation will be introduced to create a new right for all workers to request a more predictable and stable contract. The worker can decide whether they wish to make a request for a fixed working pattern once they reach 26 weeks’ continuous service with the organisation. It has not yet been confirmed when this new right will come into force. For more information on any of the above, please feel free to contact us on 01442 531021 or by email: info@barnardwebb.co.uk . The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changes since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.