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How To Negotiate The Best Settlement Agreement

Negotiating a settlement agreement is a challenging and intricate process, only made more difficult when your employer holds out on agreeing to a fair valuation. 

Because of this, you need to be prepared to secure the best possible outcome and protect your rights. In this guide, we'll explore valuable insights on how you can successfully navigate your settlement negotiations to receive the best valuation possible. 


Tips On Negotiating A Settlement Agreement

Use a solicitor that knows what they're doing

Settlement agreements can be incredibly complex and more often than not, require guidance from a specialist solicitor. With their extensive knowledge and experience in handling similar cases, they can provide guidance and support, ensuring that your rights are protected and your best interests are at heart.

If you've been subject to unfair dismissal, redundancy, discrimination, or bad treatment in any other way by your employer, Cavendish Employment Law are here to help you secure the very best outcome from your employment dispute. With a 100% success rate in contentious cases; call us today at 0207 9657203 or contact us online for a callback.

Consider carefully whether the first offer is reasonable

It's common for employers to offer a settlement early on in a dispute to try and resolve it as fast as possible. However, you should consider carefully whether to accept the first offer, as tempting as it might be, as it may not be an accurate reflection of the value of your claim. Only an employment specialist who is experienced in valuing compensation in employment cases can advise on the reasonableness of any offer of settlement.

If you're happy with the offer, and don't want to risk your relationship with your employer, you may decide to accept the first offer - although, if they do offer you a settlement agreement straight away, care should be taken to ensure you are getting a fair settlement for your specific claims. 

You should evaluate the first offer with your solicitor, who will consider the strength of your case and the alleged wrongdoing of your employer, and negotiate a better deal with your employer to secure the most favourable outcome possible. 

Be patient with your resignation letter 

If you have an ongoing dispute with your employer, it's advantageous to hold off resigning until the settlement has been agreed - otherwise, you can significantly weaken your negotiation position. 

If your employer is under the impression you will continue working for them, it might influence the terms of the settlement in your favour. 

Negotiating settlements can sometimes take months to agree, so staying under employment with them will ensure job security and allow you to retain certain benefits and entitlements, such as additional severance pay and remaining holidays. 

It also lets you end your employment on a more positive note for future references - even if this means staying a few more months than you would like, it will help maintain a positive working relationship with your employer, opening the door for future references. The additional period of employment can often be spent on Garden Leave so you will have the opportunity to search for new employment before this role comes to an end. 

Resigning from your role because of your employer's conduct is seen as constructive dismissal, which is notoriously difficult to succeed with as a claim as it involves establishing the employer has committed a fundamental breach, therefore you should take legal advice before doing so wherever possible.

Listen to what your employer has to say

At the end of the day, employers want an uncomplicated exit that keeps both parties happy while business affairs remain intact like normal. Because of this, you should always look to enter negotiations with an open mind, listening to how exactly they want it to go - as there might be areas of compromise you can agree to in return for a higher settlement agreement. 

Be realistic and know your worth

Before entering negotiations, you should discuss your rights and how much your claim is worth with a solicitor. You'll find out monetary factors including salary and bonuses, alongside the severity of why you're raising a claim. 

This knowledge will help you in settlement negotiations, placing you in a stronger position and for an adequately compensated settlement agreement.

The value of your settlement agreement will be determined by many factors including:

  • Your salary
  • Any contractual financial bonuses
  • How long you’ve been employed by the business
  • How long it will likely take to find new employment

You should be reasonable with your valuation assessment otherwise you can end up losing a lot of credibility - remember, negotiations are a two-way street, so if you don't like what your employer is offering, submit a counter offer asking for more.

Don't undervalue yourself

Knowing your worth is very important, it can be easy to undervalue yourself when trying to come up with a fair sum. This tends to be common, whether you have a long-standing relationship with your employer and don't want to sour it, or simply look at the situation with too many variables. So when coming up with your initial settlement value, take a step back and focus on what is objective.

While it's important to be aware of your worth, it's equally important to be realistic. Not every outcome will align with your expectations, so you should enter negotiations knowing that you might need to reduce how much you are asking for. 

Your solicitor will help you at every step to find a reasonable settlement agreement that factors in your claim, legal costs and time required to pursue action. 

Cavendish Employment Law specialises in negotiating exit settlements and we are able to offer no win no fee arrangements that only apply to the increase that is negotiated on your behalf.


How long do I have to respond to a settlement agreement?

Whilst there is no specified time to respond to a settlement agreement, under ACAS guidance, your employer should give you at least 10 calendar days to accept or negotiate on the offer. 

Do I need a solicitor to review a settlement agreement?

A Settlement Agreement is only binding where it has been advised on and signed by an independent adviser. 

Can I negotiate the terms of a settlement agreement?

Yes, you can negotiate any terms laid out in your settlement agreement. It is advisable to work with a solicitor during negotiations to achieve the best outcome possible.    

What is a fair settlement offer?

A fair settlement agreement will depend on your circumstances and the extent of your settlement claim; taking into account your salary, how long you have worked there and how long it will take to find a new job. 

If you're struggling to come to a fair settlement agreement on your own, a solicitor can be on-hand with the right guidance to get you through the process. Even if you feel you have a good grasp on what your settlement agreement should be, the added knowledge and insights injected into your side will help you come away with a much better settlement.

What rights do I waive with a settlement agreement?

When entering into a settlement agreement, you and the employer will typically waive certain rights which vary depending on circumstance and agreed terms. Some of the most common terms waived include:

  1. Not pursuing claims in an employment tribunal; 
  2. Statutory employment rights such as the right to notice, redundancy pay, and unfair dismissal;
  3. Keeping the terms of the agreement confidential;
  4. A non-disparagement clause that prohibits the parties from making damaging statements about the other, and;
  5. Restrictive covenants such as a non-compete or non-solicitation clause.
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