Should you sign a settlement agreement?

The settlement agreement can be a great option and comes with many benefits including the elimination of the need to go to court, which saves both time and money.

It’s always a good idea for employers to try and resolve a dispute before it goes to the Employment Tribunal. In many cases, they’ll actually be better off because they’ll have settled the agreement by paying off their employee.

If you’ve been offered a settlement agreement by your employer, you must obtain independent legal advice from employment solicitors such as before signing.

If your company doesn’t pay legal representation costs you might need, you’ll need to consult an employment lawyer or a union representative.

What’s in an agreement?

Typically, an employee receiving a termination payment agrees in writing to drop some legal claims in exchange for money.

Below are some of the key clauses you’ll find in settlement agreements. It is important to be aware of what factors are most important for you to discuss when negotiating the content with your contract partner.

Confidentiality clauses

Confidentiality clauses are not rare and they mean that employees cannot disclose any information concerning the agreement, their received compensation, or the reasoning behind it.

NDA’s, also known as non-disparagement clauses, restrict someone following termination or departure to speak out about what they know.

It’s always a good idea to read before you sign. If there is a confidentiality clause in the settlement agreement, you must be conscious on what your employer can legally gag you for.

This is a myth. Confidentiality clauses are not allowed to be used against whistleblowers.

It’s a shame that confidentiality agreement law is so unclear and overdue for reform. It’s important that protection is given to whistleblowers, providing them with advice and guaranteeing them their rights to confidentiality.

If an employer tries to insist that you put your signature on a settlement agreement with a clause stipulating that you cannot take these actions, be sure to ask them politely to remove the clause and mention that they must do so according to the law.

Similarly, your employer can’t use any legal procedure in the agreement to stop you from doing so.

You won’t be able to give a guarantee specified by the terms of the settlement that there are no circumstances that could lead you to blow the whistle.

Is whistleblowing still possible?

Yes, it is possible. The Employment Rights Act states any clause that attempts to stop employees from disclosing is not valid. Even after you’ve signed a settlement agreement that says it prohibits you from blowing the whisle, this doesn’t actually prevent you legally.

Consequences of breaching your agreement

If the terms of your settlement agreement are breached, there are two options for your employer:

Ensure you comply with all of the agreement’s stipulations. Indemnity clauses are included in many settlements to protect the employer and require you to pay them a specified amount of money.

People who have been through a contract breach, but it can be difficult to put a figure on how much should be paid. The amount you will be entitled to by the Tribunal usually varies.

Whistleblowing Considerations for Employees

Whistleblowing is a vital component of compliance. They help us raise the alarm on negligent, crime and safety issues which would otherwise go unnoticed.

It is important to report problems or potential illegal activities to management. After all, 42% of corporate fraud was uncovered by whistleblowing in the past year!

Shying away from blowing the whistle

There have been many reports from past whistleblowers having faced persecution for speaking up against corrupt organisations. Last year, a BA employee who had won a discrimination case against the company accused them of penalising her for speaking out.

More and more people are starting to ‘blow the whistle’ on unfair behaviours and this is leading to more fair policies. One way you can ensure that whistleblowers remain protected is to classify them as a ‘whistleblower’.

Whistle blowing considerations

A whistleblower is someone who exposes wrongdoings in an organisation. You’ll only be protected by the law though if you’re exposing criminal offences, regulatory breaches, health or safety (including environmental) breaches, or cover ups. If not, then you won’t be protected by law.

If you feel that it’s too late to report a potential concern, know that you can contact us and raise the incident regardless of when it happened – whether past, present or future.

Whistleblowing channels should be used as a way to report true injustices, not just gripes or anything else. You might be considering raising a formal complaint. Make sure you know what you’re entitled to by checking your grievance procedures first. If they don’t cover the issue, please discuss it with your manager or HR instead.

There are restrictions on whistleblowing law, but they often include cases where someone might feel they’ve been personally wronged.

Your company handbook should explain how to make a report and to whom. In most cases, your first port of call will be your manager if you’re unsure.

But you may also be encouraged to report your concerns to an HR representative, a legal advisor, senior management, or the board via one of the many whistleblowing support lines.

You are not there to investigate the scene, you’re a witness and an observer. This doesn’t mean that you should delay reporting to gather additional evidence because doing so will tip off the suspects and disrupt the whole investigation.

If people don’t believe in you and if no one does anything about it, or if information is being suppressed, then you have to get someone else involved. You may also have to take the press into confidence about the situation.

If you suspect wrongdoing, unethical behaviour or anything else, there may be a chance for you to report it and not get in trouble. Though the process might seem daunting, whistle blowers usually have the law on their side.

These are the requests whistleblowers often make and such a positive response can help shed light on issues that many people didn’t know about.

Despite being popular in the UK, there are no award programmes to encourage whistleblowers. Often the desire to do good outweighs any financial reward, which encourages people to act altruistically.

Some might question why rewarding whistleblowers for reporting companies that are non-compliant in critical industries is important. After all, the responsibility to comply lies with the company. But not only does it reward employees who go “above and beyond” their duties, but it also sends a message to other employees about the importance of compliance and reassures them that coming forth will result in rewards.

As the use of whistleblower rewards has become more prevalent in recent years, it not only helps uncover fraud faster but also helps bring about a new era of greater accountability.

Welcome to LA Steel Solicitors

The ever-changing jobs market is tough for employers but our legal team can help you stay on the right side of employment law. From advice to support, we provide expert tailored services to suit your needs.

Our employment law advice covers all industry sectors, so you are able to get relevant deduction whether you are a large multinational company or an individual small business. We have experience of advising clients in the London and Midlands area as well.

We all know that people are one of a business’s most essential assets. To make sure that we’re using them effectively and efficiently, they need to be supported by the right processes and we need to find ways to measure their contribution.

We work with employers like you to create a plan that suits your needs. If you need any legal help, we’ll be more than happy to provide the best possible defence for you!