How much can I get from a Settlement Agreement?
In almost all situations, the most important issue for an employee who has been offered a Settlement Agreement is the amount of money they will receive. The amount on offer varies considerably from individual to individual. There are no set rules on how much an offer should be and offers are affected by a number of factors, including:
Most financial offers in Settlement Agreements are calculated based on a number of weeks or number of months’ pay and so how much your salary is will have a big impact on how much your financial offer is. Obviously the more you are paid the more
Your Length of Service
If your employment is ending because of redundancy then the statutory redundancy payment you are entitled to will be based on how many complete years you have been employed with that employer as well as your age and your weekly salary. Most contractual redundancy payments also have an element based on length of service.
Your notice period is also often dictated by your length of service. Statutory provisions provide that you are entitled to 1 weeks’ notice for every year that you have been employed with an employer up to a maximum of 12 weeks. Contractually you may be entitled to more notice than this so you should check your contract of employment.
The reason for the offer
If the offer has come completely out of the blue and there have been no performance or conduct issues then your employer is likely to offer you more of a financial incentive to leave as otherwise there would appear to be no reason for you to end your employment.
If, however, you are facing a disciplinary allegation or you have had performance issues, and your employment is more at risk, then the financial offer may not be as much and you may be more inclined to leave for the money on offer rather than risk going through the disciplinary or performance management process which could see your employment end without a payment and you will have the dismissal on your record.
It may be that you have volunteered for redundancy, in which case there is likely to be a financial incentive for volunteering and assisting your employer with the redundancy process, perhaps helping them avoid the need to go through the selection process necessary in most redundancies.
Your contractual terms
You may be entitled to a bonus or be part of a sharesave scheme which may be of value to you and so they need to be considered when deciding on the offer that has been made. As discussed above you may have enhanced contractual terms regarding redundancy payments or a longer notice period, all of which will affect the amount you are offered.