Employers are increasingly being forced into making tough decisions on redundancy due to the lasting impact of COVID-19, the surge in energy prices and the ongoing financial crisis which is hitting businesses hard.
Staff redundancy rates have been increasing since the early part of 2022, and have risen from 1.9 per 1000 employees to 3.4 per 1000 employees, according to recent figures from the ONS.
As a result, DAS Law is witnessing a rise in legal advice calls, with employees facing difficult conversations with their employers. These situations often prove stressful but discussing a Settlement Agreement with your employer can help to resolve a dispute quickly and amicably. Settlement agreements are a much simpler and stress-free way to settle a dispute compared to having to make or defend a claim via the courts or tribunal. Settlement agreements are also being used more and more in redundancy situations.
Kath Kidd, Employment Specialist at DAS Law, says;
“Being made redundant can be an extremely stressful experience for an employee, particularly during such challenging financial times. Therefore, it is important that employees secure the best financial settlement they can achieve (deserve) from their employer. At DAS Law, we’ve helped thousands of people in this situation do just that.”
But what exactly is a Settlement Agreement, what protection does it offer and is it legally binding? Kath outlines the process and gives an overview of the information needed below.
What is a Settlement Agreement?
A settlement agreement (previously known as a compromise agreement) is a contractual agreement made between an employer and employee to settle any claims or potential claims the employee may have against their employer.
When are Settlement Agreements used?
They are often discussed when the parties are in dispute and are utilised to agree a clean break between both parties.
How do they become legally binding?
For a settlement agreement to be legally binding on the parties, it is required that the employee takes independent legal advice on the draft terms by a qualified employment lawyer. It is generally the responsibility of the employer to contribute toward any legal fees incurred. The average contribution from an employer is in the range of £300 to £500 plus VAT.
At this point, employees need to ensure they are getting the financial settlement they deserve, and this is where the experts at DAS Law can help.
DAS Law’s employment team has been providing advice, to employees, on the terms and negotiations of settlement agreements for many years. Our deep expertise and experience have resulted in us recently launching our own dedicated settlement agreement service aimed at supporting employees with disputes.
What to do next?
If you are facing a redundancy situation and would like to discuss/or have been offered a Settlement Agreement by your employer, contact DAS Law for a free consultation via our website daslaw.co.uk/redundancy or alternatively you can call 0344 264 0102 or email email@example.com.
Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created.
FWD Consulting: 020 7623 2368
Notes to Editors:
DAS UK Group: www.das.co.uk
The DAS UK Group comprises an insurance company (DAS Legal Expenses Insurance Company Ltd), a law firm (DAS Law), and an after the event legal expenses division.
DAS UK introduced legal expenses insurance (LEI) in 1975, protecting individuals and businesses against the unforeseen costs involved in a legal dispute. In 2021 we wrote over seven million policies.
The company offers a range of insurance and assistance add-on products suitable for landlords, homeowners, motorists, groups and business owners, while it’s after the event legal expenses insurance division offers a civil litigation, insolvency, clinical negligence and personal injury product. In 2013, DAS also acquired its own law firm – DAS Law – enabling it to leverage the firm’s expertise to provide its customers with access to legal advice and representation.
DAS UK is part of the ERGO Group, one of Europe’s largest insurance groups (the majority shareholder in ERGO is Munich Re, one of the world’s largest reinsurers).
DAS UK Group Twitter: https://twitter.com/DASLegalUK
DAS UK Group Facebook: www.facebook.com/DASUKGroup/
DAS UK Group LinkedIn: www.linkedin.com/company/das-legal-expenses-insurance/
DAS Law LinkedIn: www.linkedin.com/company/das-law/