Settlement agreements are now widely used in the UK. They have been received well in the workplace and were thought to be a good thing. However, since 2013 many realised they can only be used with certain staff when using standard procedures- bypassing these procedures can put employers in trouble. Seek legal advice on settlement agreements if you are considering this as an option for an employee.
Although Settlement Agreements can be a beneficial offer to workers with a long term absence, they could actually end up backfiring. Settlement agreements can be an option for agreeing a severance package with an employee. They should not replace processes and procedures.
A long-term bout of sickness usually indicates that the employee could be eligible for disability under the Equality Act. Conditions like cancer and MS are now considered disabilities, which means you can’t discriminate against them.
Otherwise, the meaning of disability would be an inability to perform everyday activities. If a sick worker’s condition continues for one year or may last for a year, they are legally entitled to disability benefits.
The right to have confidential conversations was first introduced with Settlement Agreements when they replaced Compromise Agreements in 06/2013. The idea is to have employers and employees enter into a pre-termination negotiating process, before any time or resources are wasted in dismissal proceedings.
Generally, you can’t make a wrongful termination claim involving these hearings. But regarding claims of workplace discrimination, a different set of rules apply.
Several employers have contacted us who were willing to pay a severance package only to end up with a discrimination case.
They had ended up paying me even though they were not actually in the process of termination. Simply being blind to the disability cannot always be a defence, as the obligation to know is often judged subjectively. If it can be shown that the employee has been sick over the long term due to a health issue that may last around a year and it can be demonstrated they are not required to work, then they might have a defence even if they were unaware.
Coming forward with a termination agreement when you can make modifications is better than proceeding with a termination. Canceling an employee will weaken your side of the story and create a negative image.
If you are suffering because of something your employer said or did, you can claim Injury to Feelings Awards without having to quit your job.
Employees often request severance as part of their leave from a company. In this situation, employers should still make adjustments to the agreement procedure. It might be allowing them more than the ten days as recommended by Acas.
If a person feels that they want to continue working and don’t want to be subject to severance, it is your obligation to recommend it.
Employers should solicit medical advice for employees who are sick for long periods of time. Not only to check if they actually have a disability, but also to see if any adjustments can be made to help them get better and come back to work.
After the Government introduced the Fit for Work service, which provides a health analysis and advice as well as prescribes benefits if needed, there is absolutely no excuse not to do this.
Settlement Agreements can help to provide protection for the company when an employee leaves, but never should be used to bypass fair procedures.
Would you approve of your tribunal looking at proposals for the settlement of any dispute if your employee decided to reject it?
By giving notice, the former employee will be able to decide whether to remain or leave. They can also decide if their termination package is sufficient and fair.