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Gordon Turner Employment Lawyers

Speaking about Settlement Agreements

I’ve been advising employees for over 30 years on Settlement Agreements and on the back of this I can definitely say there are ways to speak about compromise and ways NOT to!

Here’s a neutral guide (for employees and employees) with ideas on how to move things forward in terms of: what to say and what not to say.   

ACAS Guidance- Settlement Agreements (under section 111A of the Employment Rights Act 1996)

More formal guidance from ACAS on the procedures/rules for Settlement Agreements can be downloaded here copy

The Code explains basics such as the without prejudice’ rule and highlights the sort of behaviour which is unacceptable.

But this article is not about the process, it’s about creating the right frame of mind for compromise.  

A Dignified Exit

How an employee feels about a proposed Settlement will depend on where they are at in terms of their career but also life... A person with a great CV, a partner with a good income and whose life is ticking over very nicely may well see a Settlement as a great opportunity: a chance to look at how and where they work… even setting up on their own. But, for someone in debt…or for whom opportunities are narrowing it can feel very different. Add other life stresses- an ill relative or a divorce for example- and being ‘turfed out’ of the team and the routine and comfort of it can be scary.

I’ve noticed that some employees can be a bit hypervigilant. Quite often they panic at all the detail: words such as ‘redundant’; ‘termination’ or even the term ‘without prejudice.’

I’ve thought about this…doctors would probably find life a lot easier if they would say at the beginning, you’ve nothing to worry about…before talking about hospitals or in Latin!

So, I would try to avoid using harsh- sounding legalistic words. Phrases such as ‘explore,’ …and ‘dignified exit’ don’t jar so much.  



Confidentiality isn’t just about whether things can be used in evidence… it’s also emotionally intelligent. When we’re frightened or angry an audience tends to make us ‘big up’ our position. With others watching on, accepting compromise can look weak or even making an offer an admission even though the agreement will state this is NOT so.

Some employees try to push for a better deal based on other employee’s Agreements, but that information is legally confidential and jeopardises the rights of whoever it is they are talking about. It’s a very irresponsible approach and employers who sense breaches of confidentiality at large are going to want to be tough… to send a message out.

If one thing’s going to wind up an employer, it’s breach of confidentiality!   

A genuine assurance from both sides about confidentiality is a great place to establish goodwill.


We need to anticipate what the other person wants… Anyone can walk into a room with a list of what they want. You might be surprised: not everyone is interested in just money. If you can head off practical topics there may not be any monetary loss.

Try not to make assumptions. Ask what the other person hopes to achieve…and why not turn up with some ideas?

Common goals for employees   

  • A person starting a career may care more about career history than short-term monetary gain. They may be willing to consider changes to their contract or even to take on consultancy work.
  • An employee with immigration conditions on their work-permit may prefer continuity of employment over payment in lieu of notice
  • Someone undergoing medical treatment may prefer continued cover under medical insurance
  • An employee facing complex challenges in the job market may well value a contribution to outplacement services to help with their career

We should never underestimate self-esteem. You’d be surprised how important an agreed announcement or even a leaving party can be!

Common goals for employers  

  • A project still needs to be finished
  • Managing relations with an important contact
  • Avoid negative impact on morale
  • Protection of reputation
  • Strategic interests

As with any contract a Settlement Agreement can be tailored. You could have a leaving date soon for example but a consultancy agreement going forward to finish that project.

But assumptions won’t go down well and can be patronising. Ask ‘what’s important to you?’ before mentioning your ideas. Keep ideas loose so as not to be seen as having made your mind up about them. Listen and respond to their ideas.

Threats versus a ‘position’

Under the ACAS Code any threat would be ‘improper behaviour’ taking the discussions outside of the confidentiality rules so avoid anything oppressive (you will lose your job if you don’t take thisI’m going to a journalist) will fall outside ACAS protection. Just as importantly, threats NEVER work. We have endless capacity to fight when our interests are threatened.  

But Employers do need to have a fair and credible legal position about why a Settlement is under offer: performance concerns or a potential grievance or a contemplated redundancy. Being able to articulate the basics with back up will be necessary if requested. Employees don’t trust a settlement process where the employer won’t explain context. They can become concerned that something else (discrimination?) is at large.

With Employees, I stress that terms like or ‘bullying’ or ‘discrimination’ may cause the Employer to go on the defensive. They won’t want to discuss compensation without detail supporting the allegations not least because these allegations attack integrity and ability to manage.  

When referring to potential legal issues hold back: use neutral language and soft questions for example, What I don’t quite understand is…Or can you help me with? This way, you can drop issues where explanations are provided. If not, then you may be justified in pressing for a harder deal.  

What’s it worth?

A helpful neutral legal topic is remedy. If an employee goes to tribunal (and wins) then standard principles apply so it’s actually a less contentious subject than the detail of the legal issues. Important and except with discrimination type cases, the remedy is entirely about future lost income… Employees don’t know this and a lot of time can be wasted on airing information which absolutely won’t change the amounts involved in a legal process: …But I really liked my job was something I recently heard.

Having tangible information about the job market for the employee works wonders. Google ‘job opportunities’ adding the Job Title and the postcodes for the workplace and the employee’s home address and see what’s out there. If a job is there ready and waiting then an offer of 2 months’ pay tax free is actually generous given the future lost earnings issue (above).

The basic rules on compensation for an unfair dismissal are simple so it can also be helpful to circulate Section 123 Employment Rights Act 1996 if there is an ongoing debate about money. You can download it here.


Timelines focus minds, but the ACAS suggest 10 days for an employee to consider a written offer. It’s not a legally binding requirement but an unnecessarily tight window to make a decision is often seen as a kind of threat… or eve weak…as if you are trying to hide something. And if you don’t act on your threat, you’ll have lost credibility going forward.

In my experience people tend to quietly reach a good decision on a Sunday evening. By then they’ve had time to relax and often have better perspective…to discuss it with their partner (permissible under the confidentiality clause in the Agreement). Life isn’t just about work… 


Don’t be surprised if egos are engaged. Being challenged in front of our peers often wind us up. But it’s worth remembering, for all the sabre rattling, ultimately people prefer compromise. ACAS figures show that around 80% of cases which are heading towards tribunal end up being settled in the end. So, keep things on a level. Engaging egos will give the other party reasons not to settle.  

Or, as I often say to clients, ‘Why poke the bear?’

Don’t be greedy (or stingy)!

If there’s not much on the table employees often say to me: And they want me to sign up to all of that…for a month’s pay! Not a bad question.

And some employees (normally after surfing the Internet) tell me they want a 100% of the very best outcome. More likely, the negotiation will be derailed… you’ll transform the employer into a willing combatant and worse still give the lawyers something to tuck into!

Common Interest

If we sense an outcome is forced on us, we don’t want it… even if it’s in our interests. The best compromises are when we feel we’ve designed the solution together.

We need to park ideas about ‘winning’ and focus on what we want to achieve ideally without anyone feeling at all defeated. Try to be more creative and less adversarial.

Of course, there are clauses in a Settlement Agreement about the future: protection of clients; reputations; handing back property…confidentiality etc. but in reality, how will you police them? 

This brings me to my favourite term- Common Interest. I read about in a fantastic book by Edward De Bono- Conflicts: A Better Way to Resolve Them. I would say this is a ‘must read’ for anyone in HR or a potential conflict of work. I lost mine and I’ve just replaced it!

The book encourages people to step back from the adversarial approach to conflict and to see it as more of a creative process.

When people have a shared interest in how things pan out, they tend to be more protective of the deal.

And when Common Interests exist, we’re less likely to need lawyers. Negotiated outcomes which work into the future are an asset.

Gordon Turner

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Settlement Agreements - the Basics

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