A GUIDE TO SETTLEMENT AGREEMENTS AND UNFAIR DISMISSAL 
We often see settlements used in cases of potential unfair dismissal. This can come about in two ways. 
 
SETTLEMENT AFTER DISMISSAL 
If you have been dismissed (without a settlement agreement) and feel it might have been unfair, we can help you to understand whether you have any claims. If you have a potential claim for unfair dismissal, we can present this case to your employer and propose better terms for you to leave on. If your claim is strong, employers are usually open to negotiating, as defending the claim comes with legal costs and potential damages. 
 
If the employer is not open to negotiation, you will need to decide whether to refuse the offer and bring a legal claim, weighing up the potential damages for unfair dismissal against the risk and cost. 
PREVENTATIVE SETTLEMENT OFFERS BEFORE DISMISSAL 
An employer may offer a settlement agreement before commencing internal investigations or disciplinary processes. This saves the employer time and money on internal processes while avoiding the risk of unfair dismissal claims further down the line. 
 
This does not automatically mean that any subsequent dismissal would be unfair. It is usually just a business decision to reduce cost. However, we have seen settlements offered where the dismissal is clearly unfair, or even discriminatory. It is helpful to seek legal advice before agreeing to the settlement to fully understand your options, including an unfair dismissal claim. 
 
It may feel like you only have two options – accept the offer or pursue a claim – but you could also consider negotiating a better deal. 
 
 
Accept the offer 
You may decide to accept the offer because you are happy to leave your role. Disciplinary procedures can be very stressful, which often isn’t worth it if your heart isn’t in the job anymore. Accepting the settlement means you also avoid drawn out stressful internal processes, and the uncertainty during the process. It also offers the chance to have some control over references and how your departure is announced – which is unlikely if you are dismissed. 
 
Accepting the settlement may be better for your wellbeing, while also providing a sum to tide you over while you find a new role. 
 
You might also be better to accept the offer if you do not have a strong claim, as your negotiating power is low. If your employer does later find grounds to dismiss you, they are unlikely to make any more offers. 
 
Turn Down the Offer 
Sometimes employees feel they will be dismissed if they don’t take the settlement. This is not necessarily the case. In fact, if an employer has already made its mind up before investigating and following the correct procedures, any dismissal is likely to be procedurally unfair. But dismissal is a possibility. For many people, the possible impact on their career is too much of a risk. 
 
But some people choose to complete internal investigations and processes because they love their job, or as a point of principle to clear their name. 
 
 
Negotiate 
As we said, these settlements are usually a business decision to avoid lengthy processes and legal claims. Your employer may be open to negotiation to avoid this risk. It is vital to understand the strength of any claims you have, along with the potential cost and damages. If you have a strong claim for unfair dismissal, your employer is likely to be open to negotiation to avoid legal action. 
HOW CAN WE HELP 
Whether you think you’ve been unfairly dismissed, or you’ve been offered a settlement to avoid dismissal, we can help. We can advise you about the circumstances of your disciplinary or dismissal, and whether you might have grounds for a claim. We can also advise on the strength of that claim and the potential outcome. If you have grounds to negotiate, we can do this on your behalf. 
 
Get in touch for more advice about unfair dismissal and settlement agreements. 

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