How to negotiate your settlement agreement
The first thing to bear in mind is that this is a negotiation and what you are offered at the outset, as generous as it may be, is unlikely to be the best deal you can get. You should also take comfort in knowing your employment lawyer is used to negotiating settlement agreements and will do so on your behalf which is helpful particularly as, no matter what the reason for exit, you’ll still want to keep on good terms with your employer.
It is useful before starting to negotiate your settlement agreement, to provide your employment lawyer with a copy of your contract of employment and any correspondence to do with your exit, bonuses etc.
There will be many aspects to your settlement agreement negotiation but some points to remember:
- Your first £30,000 will usually be tax free
- Think how long it will take you to get back into work – will the payments cover this period? A senior manager can often take 6 months to get back into work. Outplacement support can get you back into work quicker and into a job more aligned to your talents
- Your employment lawyer should advise on how the payments can be made in the most tax efficient way. Outplacement is tax free as part of a settlement agreement and won’t come off your £30,000 allowance
- Work out what you want out of the agreement first and be prepared to compromise on some small points to get what you want
- Be careful about restrictions placed on you to do with future work. Restrictions whilst protecting your employer, may impede your ability to work for a competitor; work elsewhere in your industry; or even set up your own business
