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The Lowdown for Employees on Settlement Agreements – Infographic

How much is the payment?

When it comes to advising you (the employee) on the actual settlement agreement document, your employer will normally include a clause in the agreement to provide for a contribution towards your legal costs. This is usually between £250 and £500 plus VAT, but it could be more or less.

Assuming that you have been employed for over 2 years, and have either been dismissed, or forced to resign, and you have substancial evidence to prove that the dismissal, or constructive dismissal, was unfair, then we would expect most cases to settle for between 1 to 4 monthly salary increments, plus notice pay.

If you don’t fit into this criteria, don’t worry, you can still negotiate an exit package, also known as a settlement agreement (formerly called a compromise agreement).

Why do we state 1 to 4 monthly salary increments plus notice pay?

Well, consider what you could receive if you managed to win an employment tribunal claim. A judge might award you a larger sum of money to compensate you for your lost wages whilst you seek another job.

Some of the other factors which influence how much you should get are as follows:

Evidence – What is the strength of your evidence – maybe some emails, or even audio recordings of meetings?
Income – The more you earn, the more you are due.
Length of service – The longer you have worked in the organization the more goodwill you’ve built up.
Mistreatment – How badly were you mistreated?
Representation– Do you have professional legal representation.

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