Why do I need a Solicitor for a Settlement Agreement?
Posted on 16th April 2024
When your employer is offering terms for you to depart your present job, it is important to know if what is being offered, at the very least, reflects your statutory, or contractual rights. Settlement Agreements, are mostly offered when redundancies are being made, when a business relationship has become untenable; or even when a contract of employment has come to an end. As they are often many pages long, and complex, obtaining legal advice from solicitors who deal with Settlement Agreements is crucial. Here are several reasons why:
Protecting Legal Rights
One of the primary reasons to seek advice from settlement agreement employment solicitors is to ensure that you fully understand your legal rights, and obligations, before you sign any Settlement Agreement that you are offered. Settlement agreements will, invariably, require employees to waive certain rights that they would otherwise have under law, such as bringing a claim against their employer in the future. A solicitor can explain what rights you are giving up and whether there are any other considerations you need to have before signing away your rights. Seeking advice from a solicitor that deals with Settlement Agreements, is crucial.
A common waiver is the right to make a claim against your employer for any grievances or financial claims you may otherwise have had. Sometimes, this could result in you potentially losing out on money you could have been entitled to as compensation for your circumstances. What you must bear in mind, before you sign any Settlement Agreement, is that your employer, whilst, on the surface, are making you a compensatory offer, they are also making sure that they are covered against any potential future claim you may have against them.
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Evaluating the Agreement’s Fairness
A decent local solicitor that deals with Settlement Agreements will have the expertise to evaluate whether the terms you are offered in your settlement agreement are fair and reasonable. They can assess whether the compensation offered reflects your entitlements, especially those under your original contract or the law, considering factors like unpaid wages, redundancy pay, notice periods, and any other benefits. If there is any element of the Settlement Agreement that you disagree with, then a solicitor that deals with Settlement Agreements can also negotiate on your behalf to improve the terms of the agreement.
A common provision our solicitors check is whether the payment offered by your employer reflects what you are legally entitled to, ensuring you are not losing out on money you are owed by law.
Understanding the Implications
A settlement agreement can have various implications, including tax implications and its effect on your ability to work in the same industry, for competitors, or locally. Settlement Agreement Employment solicitors can advise on these implications, ensuring you make an informed decision. They can also help you understand any confidentiality clauses, non-disparagement clauses, and their potential impact on your future employment opportunities. Many Settlement Agreements are offered with a reference attached- often this reference is something that has already been agreed between employer and employee. However, the employment reference needs to be fair, and accurately reflect your performance during the period spent with your employer. A solicitor specialising in Settlement Agreements will seek your instruction on the reference given, checking that you are happy with the content of the employment reference, and seeking an amendment to the same from your employer, if need be.
Often, a lump sum paid under a settlement agreement is only tax free up to a certain amount. In addition, many agreements contain provisions limiting the tax liability of the company, meaning some employees will be liable for self -assessment reporting. This is important to know and be aware of before accepting such an agreement.
Legal Requirement
In many settlement agreements, it is a stipulated requirement for an employee to receive independent legal advice before entering into a settlement agreement. This requirement ensures that the employee fully understands the agreement and its consequences. The settlement agreement solicitor must usually certify that appropriate advice has been given, making it a procedural necessity. The Settlement Agreement will say that you must seek independent advice, so that they are covered, from any legal ramifications, once you have signed the agreement. Should you disagree with the terms of the Settlement Agreement once you have signed, and received your compensatory award, then the wording of the Settlement Agreement ensures that you have no right of action against your former employer, but it is your solicitor to whom you must then pursue a potential claim, for giving poor advice. Remember- choose the solicitor you want to act on your behalf, in relation to your Settlement Agreement, wisely.
In almost all agreements, the employer will agree to contribute to - if not cover all of - the employee's legal costs. Our settlement agreement employment solicitors have seen contributions vary from a nominal contribution, such as £250 plus VAT, all the way to £850 plus VAT, and higher, depending on the value and intricacy of the agreement. It's important for the employee to understand that they are responsible for any difference in the legal fees payable between the contribution from the employer and the actual legal costs. However, in most cases our settlement agreement solicitors have dealt with, our legal costs have been covered in full by the employer.
Peace of Mind
Finally, consulting with a settlement agreement employment solicitor provides peace of mind. Knowing that a professional has reviewed and advised on the agreement ensures that you are not overlooking any details or inadvertently agreeing to unfavourable terms. It reduces the likelihood of future disputes and helps ensure the settlement is final and comprehensive. When you use a solicitor that specialises in Settlement Agreements, once your signed copy of the Agreement has been sent to your employer, you can relax, and move on, safe in the knowledge that things have been done properly.
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Transparent fees.
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We are the experts.
Here at MG Legal, our team of friendly solicitors are fully-qualified and have over thirty years' experience in helping clients just like you.
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When you work with MG Legal, your solicitor will be in regular contact so you have step-by-step updates.
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If you are looking to instruct our solicitors, we have offices in Garstang, Longridge, Lancaster, and Lytham for your convenience.
Given the complexities involved and the potential impact on your future employment and financial well-being, it is advisable to seek legal advice from experienced settlement agreement employment solicitors before entering into a settlement agreement. Doing so ensures that you are making an informed decision, fully understanding the implications, and securing terms that are fair and in your best interest. In the realm of employment disputes and negotiations, professional legal guidance is not just beneficial—it’s essential.
If you have been asked to sign a settlement agreement, contact our settlement agreement employment solicitors to obtain independent, affordable legal advice before proceeding. Our solicitors can assist with your settlement agreement, as quickly as you require, to ensure that you are aware of the agreement terms before signing.
Call your local office or email enquiries@mglegal.co.uk for a response within one working hour. Our settlement agreement employment solicitors are here to help you today.
Tagged as: Settlement Agreements
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