A settlement agreement can provide a quick, amicable end to your employment, but rushing into signing can lead to costly mistakes. Here are five common pitfalls to avoid, so you protect your rights and secure the best possible outcome.
Signing Without Reading Carefully
It sounds obvious, but many employees feel pressured to sign quickly, sometimes even on the spot. Always read the agreement in full and take time to understand every clause. Pay particular attention to terms about compensation, confidentiality, and post-employment restrictions, as these can have long-term consequences for your finances and career.
Not Getting Independent Legal Advice
Receiving advice from a qualified solicitor is not just recommended, it’s a legal requirement for a settlement agreement to be valid under the Employment Rights Act 1996. A solicitor will explain your rights,check whether the offer fairly reflects what you could claim at an employment tribunal, and identify any unfair or ambiguous terms. Without professional advice, you could miss out on compensation you are entitled to or unknowingly give up valuable rights.
Accepting the First Offer
Employers often make an initial offer expecting there will be negotiation. Accepting the first offer without question can mean losing out on additional compensation, extended notice periods, improved references, or better terms on restrictive covenants. Your solicitor can advise you on what is reasonable to request and help you negotiate a more favourable agreement.
Overlooking Restrictive Clauses
Settlement agreements frequently include restrictive covenants, confidentiality terms, and non-disparagement clauses. These can significantly impact your ability to find new employment, start your own business, or discuss your experience at your previous workplace. Always review these clauses carefully with your solicitor and ensure you understand how they might limit your future activities.
Relying on Verbal Promises
Verbal promises from your employer are not usually legally binding unless they are included in the written settlement agreement. If your employer agrees to something important, such as a specific reference wording, a payment date, or a commitment not to enforce certain restrictions, ensure it is clearly set out in the agreement itself. Otherwise, you may find it impossibleto enforce these promises later.
For more information on how we can help with your settlement agreement contact us on 01524 9097100, info@pre-law.co.uk or through our online enquiry form.
