The Moore Barlow Employment team was instructed by an individual who had been offered a settlement agreement as an alternative to a performance improvement plan. Victoria Furlong successfully negotiated an increase in the termination package to almost double the initial offer.
The case background
Our client was made aware of Moore Barlow through its reputation and online presence.
Our client had been employed by a company for a number of years, and had seen it grow from a start-up to a household name brand. As a result of the major changes, our client felt a huge shift in the culture of the company, and in the nature of his role. Our client was being required to work later and later in order to meet his targets and noticed a huge difference in the expectations of his role.
Our client expressed these concerns to his employer and their response was that things were only going to get busier and they would expect him to “keep up”. If not, his performance will face further scrutiny and could be subject to a performance improvement plan. The employer said that, if our client wanted to leave, they could discuss a potential termination package.
Our client therefore decided that it was now time for him to negotiate an exit and find a new job.
However, our client had some concerns about the offer, primarily due to the fact that he was encouraged to move from overseas to the UK for the role, and would now need to return overseas. The amount offered would therefore need to cover both compensation for the loss of his employment (and failure to follow any performance improvement process), and for his relocation costs.
The employer offered to pay our client in lieu of his notice period and an ex-gratia payment equal to around 6 weeks’ pay. The total package equalled just over 2 months’ salary.
Our client was nervous as he was not a UK native and was not clear on his rights as an employee. We reviewed the offer and the terms of the agreement, noting that his length of service meant that he was entitled to more notice than his contract provided. The first suggestion was therefore to increase the notice pay to the statutory minimum to which our client was entitled, which is one week for each year of service (up to 12 weeks’ notice)..
We then proceeded to assist our client in negotiating the ex-gratia payment, emphasising to the employer that a performance improvement plan would ordinarily take months to resolve, and that if our client was being expected to waive his rights and allow his employer to avoid this process, the ex gratia payment should reflect this. Other arguments raised involved our client’s loyal service to the company during its growth, and the necessity of him moving abroad due to the termination of his employment.
After some negotiation, our client agreed to settle on a package which included the full notice pay, and an ex-gratia payment equivalent to just under 12 weeks’ salary. This meant that, in the end, our client received an uplift of several thousand pounds and left with around 5 months’ pay. This uplift allowed him to relocate with peace of mind, and with a termination payment large enough to cover his living costs until he found a new role.
The value of good advice
This situation demonstrates the value of good advice being given by a solicitor regarding a settlement agreement. Often considered a “box-ticking” exercise, legal advice and a signed legal adviser’s certificate is required for a settlement agreement to be binding. However, this legal advice can mean a difference of thousands of pounds for the individual who has been offered an agreement. This is not to mention the value of the explanations that will be given about the hefty waiver of claims, obligations and warranties upon individuals when signing a settlement agreement, which can prevent inadvertent breaches of the agreement.
A word from our client and Victoria
Thanks so much for your help, I don’t think I would have landed in these numbers without you… you were worth every penny!
Client
“It was a pleasure assisting this client in negotiating an exit package which allowed them peace-of-mind when pursuing their new venture. This case demonstrates the essential nature of legal advice in settlement agreements, which is often overlooked as a “tick box” exercise, but can be extremely valuable in protecting the best interests of an individual who has found themselves suddenly unemployed.”
Victoria Furlong – Employment solicitor
