Employer Advice On Settlement Agreement Negotiations

Professionally dealing with a bad work relationship that isn’t able to be resolved via mediation or other such means can be stressful.

Employment disputes are difficult for both employees and employers. Employees often have to give up the right to an income stream in order to receive a one-time payout of money. Settlement agreement solicitors in the UK can provide the necessary legal advice on such matters.

Understand beforehand

Settlement agreements are a legal arrangement. Making an agreement without looking at all of your other options may not be wise if you can deal with it yourself or if the issue doesn’t warrant it. Experts advise against settling conflicts with employees by giving them a settlement agreement.

It will damage your company’s reputation and good working relationships if you try to solve disputes with one-time deals. Make sure you also give it more time for the discussion process or your organisation’s in-house channels to work before satisfying the employee’s request.

Starting your negotiation

Settlement agreements are traditionally proposed by a employer. You will be able to make your position known first, which helps to avoid misunderstandings and make sure that you’re able to deliver on what’s been agreed upon. When you write your agreement, you should include how far you’re willing to go and how far you’re not.

When you’re preparing your initial settlement offer there are many factors to consider.

The financial impact the company may have to deal with should settlement agreements not be used.

Seeking advice from a lawyer

One way you can improve your settlement package is to make it stand out. The fact that the other party isn’t fully satisfied or thinks they have a worthwhile case should be an encouragement to do even more. It is difficult for organisations to agree on this type of issue, but if it does work for them too, it will save you time and money. To find out the amount you should offer, talk through your options with someone who might have experience in this kind of negotiation.

The process ACAS recommends

Once your first offer has been made, you can start talking about settling. We recommend first contacting Acas, as they could be able to help get negotiations going. If they can’t come up with an agreement then your next action might involve taking a case to the employment tribunal.


Your response to your employee’s request for more time should be a firm offer, with no room for more negotiation. We should take the time to reach out to their current/close colleagues in the company during this waiting period.


After submitting your offer to them, arrange a meeting with them and discuss it face to face. Before the meeting, you should make sure to note why an offer is being made and to anticipate any questions that may arise.

We recommend that the employee is allowed to bring a solicitor, a representative from your union or colleague to help them understand what they are going through.

Act objectively

Things are going to get emotional during negotiations so you should put your feelings away. Remember, no matter how angry you get, don’t let it stop you from being professional and negotiating in a constructive way. In light of the recent event, some employees might have also been adversely affected. As an employer, be mindful to offer emotional support and address any concerns they may have.

Approach your discussions with an open mind and the goal of coming to a beneficial agreement. This will help you to avoid confrontation, but also to arrive at a better arrangement in the future.

Understand the impact of the offer you’re making

The employee will probably be disappointed and become more stubborn after they have made their demands. Just stick to your offer, stay confident in it and you should be able to resolve the situation quickly by meeting a few of their demands.

The next time you’re trying to figure out the amount of compensation to offer, consider what the courts might rule. It will be assessed with any necessary tweaks for settlement agreements not being as expensive or risky as litigation. When you receive a counter-offer, evaluate it carefully. Think about the pros and cons before you make your decision by weighing your original points against theirs. Once you have done this then feel free to make a counter-offer to them

Negotiate the details

In order to be fair, it’s important to make sure all the necessary details, including payment method and deadlines, are included in the agreement.

However, if you’re looking to terminate the relationship, things don’t have to end on bad terms either.