Avoiding employment tribunals – settlement agreements with staff.
There are little things more stressful in life than a serious argument, disagreement or aggravation with another human being. If that human being also happens to be a member of staff it could be very expensive aggravation too. Is it worth compromising? Do they have any sort of a case against you and even if they don’t, will compromising save you time, money and yet another nail in the old pulmonary coffin? The answer is of course yes in most circumstances.
If you are in a dispute with an employee, you’ll have to consider how to bring the dispute to an end swiftly and fairly. You’ll also want as little disruption to your time and business as possible. If you dig your heels in, and proceeding to a contested Tribunal hearing, both you and the employee must have considered ways to settle the dispute anyway, so this is definitely the last resort. Where a dismissal or termination is inevitable, a well drafted ‘Settlement Agreement’ can provide a clean break . You can negotiate on a “without prejudice” basis when trying to reach a compromise without risking a weakening of your case if the negotiations break down. But the negotiations need to be carefully managed so that the best outcome is reached, as in many cases both employer and employee may have ‘transgressed’ to a degree.
Once you’ve agreed terms, it is important to set these out in a formal Settlement Agreement. This is a legally binding document and the only method by which an employee can validly give up their statutory employment rights. A well drafted Settlement Agreement allows both parties to move on knowing that they will not be returning to court to argue over the termination of the employment.
Getting it right
The employee must take legal advice on the terms so they can understand the effect it has on them. Normally, the employer pays to have the settlement agreement drafted and pays a contribution towards the employee’s legal costs for this advice. It is important therefore to get it right from the start to avoid spiralling costs or escalation to arbitration and tribunal, a long and expensive process. Let’s face it, running a business is hard enough without dwelling on that irksome employee for several weeks or worrying about where you may have got it slightly wrong.
What to do now
So why take the risk? At Parrot & Coales we can advise you on how to minimise the risk of a claim of unfair dismissal and where appropriate, prepare valid Settlement Agreements quickly, legally and for less than you might think.