Settlement Agreement Question: Is there a database of settlement agreements?

I’ve been thinking about my options. I can accept an offer of a settlement agreement or turn the offer down and bring an employment tribunal claim. I’ve been advised by an employment solicitor I have a good case and reasonable chance of getting more compensation if I go to tribunal. My solicitor thinks my employer has made a very low offer thinking I may not pay the employment tribunal fee to bring a claim. I’ve heard there’s a searchable database where anyone can search to see if someone has issued an employment tribunal claim. Does that apply to settlement agreements as well?

Employment Solicitor answer:

The answer to your question depends upon the nature of the settlement and the point at which it was concluded.

Settlements after an employment claim has been lodged at an employment tribunal

In 2016 the Government announced it plans to publish employment tribunal Judgments online. Previously hard copies were stored centrally at the tribunal’s facility in Bury St Edmunds. Earlier this year (2017) the new system went live and to many people’s surprise it became apparent that Judgments recording the dismissal of a claim following the parties having agreed a settlement agreement were also being published online.

Here’s a fictious example of the kind of wording that is being published online:

Employment Tribunals

Claimant: Fred Bloggs

Respondent: The Employers Name

Judgment

Terms of settlement having been agreed between the parties, a copy of which settlement agreements is within the Tribunal file, the claim is dismissed on withdrawal 28 days from the date this Judgment is sent to the parties unless either party applies for consent to restore before that date.

As you can see, the name of the employee, the employer and the fact of the settlement is recorded and available for anyone to search for, or happen upon.

Many employees will assume when they settle (after issuing a claim but before a final hearing) that the settlement is confidential. But the fact a claim has been issued, and then settled, is being recorded and made available online.

Many employees will be concerned that anyone, including for example a prospective employer, recruiter, or a nosy neighbour, will be able to find out he employee brought an employment claim against a former employer.

Some will ask whether employers might begin to use this online search facility as part of their recruitment process. In some situations if an employee found out he had not been offered a job because he had lodged an employment tribunal claim, he may be able to issue a claim against the new / prospective employer. But in reality, how will the employee ever find out that was the reason he didn’t get the job.

Any employee thinking about bringing a claim in the employment tribunal will need to consider these risk arising from the publication of employment tribunal Judgments online.

What about if the settlement agreement is concluded without he need for employment tribunal proceedings?

In this situation there won’t be any employment tribunal Judgment to publish. The advantage for the employee (and the employer) is that the terms of the settlement agreement can (and usually do) require the parties to keep the terms of the settlement confidential. The scope of the confidentiality obligations may also apply to the existence of the settlement agreement, not just the terms of settlement.

Here’s a link to the Government’s search facility: Employment Tribunal Decisions

Answer provided by a contributing employment solicitor on 4 May 2017.

Read more questions and answers here: Settlement Agreements

IMPORTANT: The above contents are for guidance only and do not constitute legal advice. You should consult an employment solicitor without delay if you require employment law advice.

I’ve been accused of poor performance and have been sent home until further notice (to think about a settlement agreement offer my employer has made). It feels like I’ve been banned from coming in and treated like I’m guilty of gross misconduct.  I was told they have evidence of gross negligence and I may be dismissed.

My remote access to email has been cut-off and I’ve been asked to hand over my work office keys and fob. I was basically frog-marched off the premises.  The letter I was handed gives me five days to sign the settlement agreement. Any advice?

Answer:

Poor you. It sounds like you’ve had a tough time. I know it’s hard but try and be objective. You don’t say what the financial terms of the offer are or whether you accept your employer’s concerns about your performance are valid and if so how serious.

You need to weigh up the value of the offer against how things may play-out if you turn it down, including a disciplinary and possible dismissal, if you are guilty of gross negligence. Your employer has not said you will be dismissed, only that you may be dismissed. But you may feel the way you’ve been treated points towards your employer having pre-determined the outcome.

An employer that has genuine concerns about an employee’s performance may decide to make a settlement agreement offer. However, a clumsy and insensitive approach by an employer puts it at risk of claims.

Unfair Dismissal

You do not say how long you have been employed. If you have two or more years’ service, you have accrued the right not to be unfairly dismissed. In certain circumstances, an employee will be able to bring an unfair dismissal claim regardless of length of service. For example, if dismissal was in connection with pregnancy or because the employer was a whistle-blower. No minimum service is required to bring a discrimination claim. If you believe your employer is treating you this way for some other reason you should discuss this with your solicitor.

Constructive Dismissal

If an employer acts is a way (without good cause) that was likely to destroy or seriously damage trust and confidence, an employee may decide to resign (within a reasonable period of time) in response and bring a claim of constructive unfair dismissal.

The way you employer has treated you during the settlement discussions may form the basis of an argument it breached mutual trust and confidence, giving you (the employee) the option to immediately resign and treat yourself as constructively dismissed. Bringing a constructive dismissal claim is not easy. The burden of proof falls on the employee to show he resigned in response to a serious breach of a fundamental term of the employment contract. Your employer may deny acting as you allege leading to a factual dispute an employment tribunal would need to decide. Or your employer may argue it behaved reasonably (and with good cause) in the circumstances. You should consider discussing these issues and the relevant documents with an employment solicitor so you can obtain a legal opinion specific to your case.

Admissibility of Settlement Discussions

Your employer may also argue you cannot rely on what was said and done in the settlement discussions because they are inadmissible.

The offer of a settlement agreement cannot be used in an ordinary unfair dismissal employment tribunal unless the Judge accepts the employer said or did something during those discussions that was improper. You may be able to convince an employment Judge that your employer acted improperly by only giving you 5 days, or by frog marching you off the premises and cutting-off your work. These are only arguments which if successful, would enable you to rely on the discussions in support of your claims. Whether this behaviour would be deemed sufficient to amount to grounds to treat yourself as constructively dismissed would be a separate issue for the tribunal to decide.

You don’t say what (if any) evidence your employer has provided you with to support its contention you are guilty of gross negligence. If the employer has misrepresented this evidence this too may amount to improper conduct by your employer.

Careful analysis of the evidence including any notes or meetings and /or letters should take place, to assess the strength of your case.

Deciding to resign is a big decision and one you I recommend you consider very carefully, assessing the personal issues, the financial implications, availability of legal advice and merits of your claims.

Settlement agreements provide certainty and usually prompt payment. Bringing a claim will take months with no guarantee of a successful outcome. Claims can be stressful. Depending on your funding options, you may also have legal costs and tribunal fees to consider. You should seek advice from an employment solicitor without delay.

Answer given 27 April 2017 by contributing settlement agreement employment solicitor

Read more: Settlement Agreements

IMPORTANT: The contents of this page are for guidance only and do not constitute legal advice (nor are they intended to constitute legal advice). You should consult a solicitor for advice on your particular case and circumstances.

Undue pressure to accept settlement offer?

In an attempt to get the deal done, some employers may be tempted to put as much pressure as they can on the employee by setting a tight deadline for acceptance, or perhaps characterising the evidence they have, stronger or more conclusive, than it really is.

Such an approach could land the employer in hot water. The risk to the employer is that the employee resigns in response and brings employment claims, for example constructive unfair dismissal.  But can the employee rely on what was said and done by his employer during a pre-termination discussion about a settlement agreement?

Discussions before termination about a settlement can amount to a pre-termination discussion, commonly known as a protected conversation, as defined by section 111A of the Employment Rights Act 1996.

What is a protected conversation?

Where an employer offers an employee a settlement agreement, the fact the employer made the offer and the detail of the offer, are not admissible in an ordinary unfair dismissal claim.  But if an employer acts improperly, the offer become admissible.

Spinning (or misrepresenting) the facts?

A recent case in the Employment Appeal Tribunal provides a warning to employers. The employee was suspected by his employer of financial negligence. His employer sought assistance from an accountant who recommended a full disciplinary investigation. Instead the employer decided to offer the employee a settlement agreement to leave. During the settlement agreement discussions and in an offer letter, the employer told the employee the accountant had concluded the employee was guilty of gross misconduct. This was not misleading and untrue.

Unreasonable time-scales to accept the offer

The employer gave the employee six days to accept the offer, with no offer to consider an extension.

Constructive Dismissal Risks

The employee declined the offer, resigned and brought a claim for constructive unfair dismissal, relying on alleged unreasonable conduct of his employer in the way it made the settlement agreement offer.

Admissibility

On appeal, the Employment Appeal Tribunal decided the settlement agreement discussions and offer letter were admissible because the employer had acted improperly, by misrepresenting the accountants recommendations and only giving the employee six days, without good explanation or option to extend.

Conclusions

Pre-termination negotiations (Protected Conversations) can be a useful device for employers and employees to settle disputes amicably. It helps to discuss and agree severance terms. But they do not replace established employment law good practice nor do they give the employer carte blanche to act improperly without consequences. If an employer pressurises an employee (for example with an unreasonable deadlines) or misrepresents the strength of the case against the employee (for example saying an accountant has determined he is guilty of gross negligence) to try and force the deal, the employee could rely on what was said and done during the settlement discussions in support of an ordinary constructive unfair dismissal claim.

In this case, rather than go through the disciplinary investigation the employer attempted to cut the process short but did so in a way that was improper, enabling the employee to rely on the discussions at the employment tribunal.

Lessons for employers

• Is the timescale for accepting the offer reasonable and/or justified and/or agreement with the employee, taking into account all the circumstances? A longer period may be appropriate depending on the facts, for example the time of year, the employee’s ability to get advice from his union or solicitors, Consider the ACAS guidance on timescales for access.
• If you elect for a short-time limit, is there reference to an extension, if more time needed?
• Has the employee agreed to the timescale for coming back to you with an answer?
• Is removal of email access really necessary? If removal is not ‘with good cause’ / justified there is a risk it will be perceived as pre-determination and/or a breach of trust and confidence, giving rise to a constructive dismissal risk?
• Be careful not to misrepresent or exaggerate the background evidence or circumstances leading up to the decision to make the settlement agreement offer.  
• Consider seeking legal advice before making a settlement agreement offer and/or drafting settlement agreement offers, to ensure the above issues are balanced against the risk of a finding of improper conduct and/or constructive dismissal claims.

Full transcript of case: Lenlyn UKLtd v Mr H Kular

Read more articles: Settlement Agreements

IMPORTANT: The contents of this article are for guidance only and do not constitute legal advice (nor are they intended to constitute legal advice). You should seek advice from a solicitor without delay in relation to your particular case and circumstances.