Settlement Agreement

An employer may offer an employee a Settlement Agreement (formerly called a compromise agreement). This is in order to terminate their employment on the condition that the employee gives up their right to bring a claim to the Employment Tribunal. One section of this must be signed by a solicitor in order for it to be valid.

Your former employer does not have to supply a reference to a new employer. However, if they do so, then they have a duty to ensure that its contents are fair, true and accurate. If you feel that an unfair or inaccurate reference has been supplied, then you may have a course of action against the person or company who provided it. Sometimes an agreed reference may form part of a Settlement Agreement.

Notice & Payment in Lieu of Notice
If you have worked for your employer for more than one month but less than two years you will be entitled to at least one week’s notice if they want to end your employment. After two years, you are entitled to one week’s notice for every complete year of service up to 12 weeks, although often your contract may allow for more. Employers may choose to pay you in lieu (instead) of notice, which means that you will still get paid but will not be required to work. Sometimes this is referred to as Gardening Leave. 

Tribunal Awards
Tribunal Awards are split into two types of award:

  • the Basic Award 
  • the Compensatory Award

The Basic Award is calculated in the same way as Redundancy Pay. There is no specific calculation for the Compensatory Award, but it is generally to put the employee back in the position they would have been in had they not been mistreated by their employer. This latter Award might be subject to a cap, depending on the complaint.

Tribunal Fees
Tribunal Fees were introduced by the Government in July 2013. How much you have to pay will depend upon the type of claim that you are bringing. There is a fee to start your claim and a fee if you want the matter to proceed to the Tribunal. Some people are eligible to pay a reduced fee, or no fee at all if they satisfy a means test. It is best that you check with NewLaw’s experienced solicitors, who can advise you beforehand on your eligibility.

Redundancy Pay
Redundancy Pay is a tax free payment that is paid to an employee if they are dismissed from their employment. The exact amount is based on an employee’s length of service, their age at the time they were dismissed and how much money they were earning. A redundancy pay calculator can be found HERE.

All workers are entitled to receive 5.6 weeks paid holiday per annum (this could be inclusive of bank holidays), which is to be paid at the normal rate. You should not lose out on money just because you are taking a holiday out of your entitlement. You should be allowed to take this holiday and employers are generally not allowed to pay you for untaken holidays at the end of the year. In some circumstances you will be allowed to carry your holiday into the next annual leave year (usually if you have been off work through ill health or maternity leave for a long period of time).

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