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Settlement Agreements

Employment Law Team who deal with Settlement Agreements at ELP Arbuthnott McClanachan

ELP Arbuthnott McClanachan’s employment law solicitors are specialists in Settlement Agreements. 

Many people will never have heard of a Settlement Agreement, but they are one of the most important legal contracts relating to employment law. Our Employment Law Practice, with offices in East and West Edinburgh, deals with Settlement Agreements on a daily basis.  Until 2013 Settlement Agreements were called Compromise Agreements.  Many employers still refer to Compromise Agreements, and while they are extinct going forward the typical content of a Settlement Agreement is almost identical to that of the old Compromise Agreement.

It is crucial that employees and employers receive properly informed advice in relation to Settlement Agreements because their effect is so fundamental.  For example, an employee who signs a Settlement Agreement without proper advice can find that they can no longer pursue a valuable claim which would have been preferable to the deal that they have been offered.  The employee can also find that they have signed up to restrictions in a Settlement Agreement which are far wider than the employer should be able to insist on.  Employees can often find that had they taken advice from an employment law specialist they would have known to negotiate on the amount and/or terms of the employer’s offer rather than simply accept the offer made.

ELP Arbuthnott McClanachan offer a specialist Settlement Agreements employment law advice service for employees.

Settlement Agreements – Employer

From the employer’s perspective, while there are many templates of Settlement Agreements available, some offer more protection than others.  We believe it is important that every Settlement Agreement is tailored to meet the needs of the individual case.  These will be different depending on the kinds of claims that the employee may have, the kind of job that the employee had, and whether or not there are more complicated matters to consider such as confidentiality, future competition and protection of the business, and sums owed by the employee to the employer.  Most importantly, if the Settlement Agreement is not properly drafted then it may not achieve what it is meant to, namely a clean break between the parties with no ongoing dispute.

Settlement Agreements are most commonly used to record a legal agreement between an employer and employee on the terms relating to the termination of the employment or the settlement of a claim.  This can follow upon a dispute in the workplace, a redundancy situation, an employment tribunal claim, or a simple personality clash or difference in opinion on the future.  Settlement Agreements will tend to narrate that the employer will offer the employee certain sums of money (which can include salary, benefits, notice pay, redundancy pay, compensation for loss of employment, and ex gratia or non-contractual payments), and other no monetary benefits such as an employment reference, in exchange for the employee agreeing not to pursue the employer for employment related claims.  The kinds of employment law claims which employees will be asked to waive in Settlement Agreements will include unfair dismissal, wrongful dismissal, redundancy pay, discrimination and breach of contract.  Employees will not normally be asked to waive future claims unrelated to their employment, claims in respect of accrued pension rights, and claims for latent personal injuries the basis for which the employee is not aware of at the time of signing.

While the provisions of a Settlement Agreement can be relatively standard, there are aspects of Settlement Agreements which must be considered very carefully.  The tax position can often, in reality, be less favourable to the employee than was anticipated.  Some restrictive covenant clauses can have the effect of preventing the employee from working in their industry for a significant period.  Some repayment clauses can create an obligation on the employee to repay the Settlement Agreement monies when this would not be appropriate.  Some clauses can be drafted so widely in favour of an employer that they are actually unenforceable and therefore harmful rather than helpful.

Settlement Agreement Advice

ELP Arbuthnott McClanachan advise employees and employers in relation to all aspects of Settlement Agreements.  We recommend to our clients that they contact us at the earliest possible stage.  Our experienced employment lawyers can advise on when a Settlement Agreement would be recommended, and how the possibility of a Settlement Agreement can be raised by an employee or employer without prejudicing the client’s position.  This can include holding a “without prejudice” discussion.  Because our Employment Law Practice acts for employees and employers and represents them in Employment Tribunal claims, we are able to advise on what would be a fair and reasonable settlement figure, and we can negotiate effectively on behalf of our clients to achieve the best possible result.  Of course, it can be the case that our client has already arrived at a deal that they are happy with before we become involved, and we can simply assist with the finalisation of the paperwork if that is required.

You can meet with one of our employment law solicitors in relation to a Settlement Agreement in either of our Edinburgh offices in the West and East of Edinburgh.  Our clients can also instruct us remotely if they cannot travel to our offices.  We are fully aware that the conclusion of Settlement Agreements can be very urgent for both employees and employers, and we will be happy to prioritise matters where required.

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Ian was the best in helping me out after I contacted him with an employment law issue. I contacted a few solicitors in Edinburgh via their online web forms and Ian replied to me within minutes of my query which was excellent! Other solicitors I contacted at the same time either didn’t reply at all or replied weeks later which was not helpful!

Ian was helpful, friendly and knowledgeable – never too busy to reply to my emails when I was looking for information, and occasional reassurance. I had an initial call with Ian, then a face to face in the office and after that most contact was by email which suited me perfectly. Ian was professional at all times and really made me feel valued as a client. His hard work resulted in a favourable result for me, and I would not hesitate to recommend his services to anyone. If I ever need a solicitor again in the future, Ian will be the first person I contact. Thank you!

I was a Managing Director of an acquired business, going through a long protracted settlement agreement when I approached Duncan McFadzean and his ELP team at Arbuthnott McClanachan to take over my case as there had been an issue with the initial firm of lawyers I had engaged. Duncan very quickly got up to running speed with my case and managed it very pragmatically with great control. He judged his approach with me absolutely perfectly and always explained clearly and concisely, the different courses of action with his recommendations. I have used many different employment lawyers throughout the years, (both for the business and for myself), but have never found a more complete professional approach than the ELP Arbuthnott McClanachan experience. I cannot recommend their services enough. Simply fantastic, thank you!
Don’t go anywhere else, just use the ELP team at Arbuthnott McClanachan, great service and great results!

I recently used E.L.P. when I sold a bungalow and purchased a flat. I was very impressed with the level of service and would have no hesitation in commending the company to future clients. Communications were efficient at all times and matters responded to very quickly. The financial transactions were all done within an hour of the completion time and my bank account credited.

It was a pleasure to do business with E.L.P.

We are a medium sized law firm which does not have a department specialising in employment law matters. We have used ELP in relation to any employment law input we require as a firm. We have also referred a number of our clients to ELP for advice on such matters as we value the expert knowledge and quality service that Duncan McFadzean and his team provide. It is of paramount importance to us that both our own and our clients’ affairs are dealt with in a confidential and sensitive manner, and we know that we can rely on ELP for this. We would not hesitate to recommend ELP to either employers or employees who need advice in the employment law field.

Thank you so much again for recommending Laura McFadzean, we are so so impressed by her, she is a true powerhouse!! From estate law knowledge to quick and efficient handling of anything you ‘throw at her’. She has been fantastic to have by our side throughout both the Aberdeen purchase and the Edinburgh one.

We deal with digital distribution of music. We wanted to use a law firm who were good at what they do but who also had a modern and friendly approach that would suit our kind of business. We have used ELP to frame our employment contracts and employment policies, which are well drafted and tailored to suit and protect our business. We are also able to call them when anything legal comes up in the business that we need some guidance on, whether it be staffing issues or anything else. This is probably the best part of the service we receive – ELP are always happy to help, and we can speak to them as business advisers as well as employment lawyers. We would definitely recommend ELP to any business needing employment law or just general advice.

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