I’ve had an ongoing dispute with my employer about contractual issues and was going to escalate this through an employment tribunal. They have offered me a ‘Settlement Agreement’. Can you offer any advice?

I’ve had an ongoing dispute with my employer about contractual issues and was going to escalate this through an employment tribunal. They have offered me a ‘Settlement Agreement’. Can you offer any advice?

In situations where an employee has a complaint against an employer, and they are able to pursue this through an employment tribunal, it is possible for the employer to attempt to settle the dispute to prevent a claim being made against them.

If your employer attempts to convince you to forfeit your right to go to a tribunal, there are only two options they can take to do this legally; by negotiating a ‘COT3 Agreement’ through independent public employment body ACAS; or by convincing you to agree to a ‘Settlement Agreement’.

A settlement agreement could mean your employer will promise to pay you a sum of money, stop treating you unlawfully, or both.

What is a settlement agreement?

A settlement agreement forms a legal contract between you and your employer which you must both adhere to, and your employer may request you to keep this confidential.

Usually, an employer will pay for you to receive independent legal advice, because if you sign a settlement agreement without receiving independent legal advice first, you are still able to take your case to an employment tribunal.

***It is important that you seek independent legal advice, unless you are confident about how much your case is worth***

You should ensure you provide any relevant documents and dates with you when going to get advice, including your contract of employment, the date of the dispute, and copies of any emails about settling it.


If you want to avoid negotiating with your employer, your next option is to take them to an employment tribunal, but you must begin early conciliation procedures prior to doing this.

What are the stages / requirements of a settlement agreement?
 
An employer will usually arrange a meeting, or write to you, outlining the details of the Settlement Agreement.

Once you have received an offer from your employer, you consider things such as how strong your case is; how far off their offer is from what you could expect to receive; if you want your job back or keep your job providing the agreement states that your employer will make changes in your workplace; or alternative arrangements.

If the offer seems reasonable, it is probably best to accept it.

If the offer appears to be unreasonable, you can either request for them to increase the sum, or decline the offer and proceed to the tribunal stage.

What happens next?

After securing an agreement with your employer, they will normally confirm this in writing.

However, you should check to ensure that the settlement agreement has been recorded in writing; addresses the specific dispute you are having trouble with; has been written up by a lawyer who acts as an independent person from your employer; provides the name of this lawyer; establishes what you and your employer agree to do; and outlines that the agreement meets the rules about settlement agreements. 

If all conditions are not satisfied, the agreement will be invalid, and you are not required to adhere to it (but your employer must do so).

This in turn allows you to still make a claim at an employment tribunal. If an employer breaks the conditions of the agreement, you can pursue them in the sheriff court to make a claim for breach of contract.

I hope this helps, and you sort out the issues with your employer.

You can access free, impartial advice on any topic (including employment) from advice.scot by contacting 0808 800 9060 or by visiting www.advice.scot. Advice is available to everyone in Scotland, at no cost, regardless of personal circumstance.