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The 5 Steps to Making a Settlement for an Employee

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Disputes between employers and employees occur from time to time and, often, they can be resolved quickly and satisfactorily if promptly handled in a sensitive way. However, where a dispute persists and a resolution cannot be agreed upon, it may be necessary to enlist the professional assistance of an experienced solicitor who has the knowledge and interpersonal skills to negotiate an outcome.

In this article, we will discuss the six steps to making a settlement for an employee. For more information about our services, please see our business employment page.

What Is An Employee Settlement Agreement?

A settlement agreement is a legally binding agreement between an employer and an employee that is designed to bring a dispute to an end. Drawn up by an experienced solicitor, it will either agree to a sum of money that the employer must pay to the employee or form a legal agreement that the employer will stop treating the employee unlawfully. In some cases, the settlement agreement will fulfil both roles.

Securing a settlement agreement between employer and employee can be complicated and time-consuming. At Astle Paterson, our expert legal time is here to support you through the process.

The Key Steps To A Successful Settlement Agreement:

Seek Professional Advice

The first step when you receive a settlement agreement is to seek professional legal advice. Your solicitor will help you to go through the financial aspects of the case, so you understand the implications and the value of the dispute and ensure that you have the necessary documentation, including:

Your contract of employment
Identification documents for parties involved in the dispute
Dispute reports and documentation of any disciplinary action, allegations of misconduct etc
Evidence of the dispute, such as letters, texts, emails, voicemails, minutes of meetings etc

Negotiate

Next, you will commence negotiations with your employee, either in person or in writing. This stage of the process will outline what the employer and employee believe should be included in the settlement and, if a conflict of interest arises, you should have the opportunity to negotiate so that both parties meet in the middle.

Stand Up For Your Interests

When negotiating with your employee, it is vital that you don’t immediately accept what they say as their final word. Explain clearly what you feel you need from the settlement for it to address your mutual concerns and meet your needs, such as:

How much the employer agrees to pay and whether this matches the stated demands/requirements of the employee.
Any changes to employment or working conditions if the employee is remaining in post.
What steps the employer will take to prevent a recurrence of the problem?

Bear in mind that the negotiation may not progress as you hope, so have backup options planned so that both parties feel listened to by the end of the meeting.

Reach An Agreement

Once both parties have reached an agreement the settlement agreement will be created. The settlement agreement must:

Be in writing
Explain the dispute
State the exact terms to which the employee and employer have agreed
Be confirmed to be a settlement agreement.

Act If The Employee Fails To Comply

If the employer fails to abide by the settlement agreement, even after a short period of time, then you should consult your solicitor to reopen the dispute or take legal action.