The employment relationship between the employer and the employee is governed by both a contract of employment and employment legislation. If your employer has not provided you with a written contract you should ask for one.
Employment rights can start even before an employee commences their employment e.g. the right not to suffer discrimination in the recruitment process. However and very broadly, one of the most common rights and claims submitted to an Employment Tribunal relates to “unfair dismissal”. After a member of staff has been employed for more than two years if an employer wishes to dismiss it must have a legally “fair reason” and go through a “fair procedure”. If the employer does not do so the dismissal will be unfair and the employee can assert unfair dismissal and sue their employer in an Employment Tribunal.
As an employee you should expect your employer to always act in accordance with your contract and if it decides to dismiss you it should ensure that the dismissal is fair.
Many employees expect their employers to make a settlement offer to them when they leave their employment, particularly when it’s a distressed termination i.e. to give them a “pay off”. There is no obligation whatsoever for an employer to offer a pay off or present a settlement agreement. After all, if the employer acts in accordance with the employee’s contract and legislation that should be the end of the matter.
Employers always have a concern about the termination of an employee’s contract. Namely, has the company acted lawfully? In particular, has the employee been dismissed fairly?
Determining whether a dismissal is fair sometimes can only be decided after there has been a detailed consideration of all the facts. Even then it may be that matters can only be decided by attending court i.e. the Employment Tribunal. Therefore, to guarantee closure on the employment relationship, employers frequently offer settlement agreements. The latter buys off an employee’s claims and are intended to be a full and final settlement.
In offering a settlement agreement the employer should make a termination payment that is over and above the employee’s strict legal entitlement. So if you can persuade your employer to offer an agreement it may be financially beneficial for you.
This article has been brought to you by Graeme Bellenger, an employment solicitor at our Canary Wharf office who frequently advises on settlement agreements. You can contact Graeme using the form provided or call him on 0207 925 0303 or email email@example.com.
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