There are currently 5 potentially fair reasons for dismissal in the UK. Each of them requires a process, sometimes the process can be lengthy, and short cuts can be risky.
Little wonder then that so many employers choose the ‘no fault’ dismissal route when enough is enough, but when one of the permitted routes to termination might take too long, or might not pass legal scrutiny.
The no fault dismissal normally involves a negotiated exit, facilitated by a settlement agreement. Care needs to be taken with these conversations because, while the law provides for a properly conducted confidential conversation, an improperly conducted one will remove the cloak of confidentiality, and can leave the employer vulnerable to constructive dismissal claims or worse.
Omny has considerable expertise in this area, and has helped employers prepare for and conduct hundreds of discussions, achieving necessary change without ensuing litigation.
Top tips for employers contemplating a dismissal via a settlement agreement
So what’s important when considering a negotiated exit discussion? Here are our top tips for employers.
Take advice
Most employers will approach this scenario only once in a while. This is not a time to shirk on taking professional advice, but remember that a lawyer is not the only option here. Omny’s HR staff advise on hundreds of settled exits, and our team have the same access to legal document databases as lawyers – we can draft comprehensive settlement agreements for complex senior exits, and more straightforward documents for others.
Be realistic
Remember that a settled exit is always a negotiation and don’t be tempted to skimp on settlement payments. The employee is after all being asked to sign away their legal rights, and an agreement provides opportunity to bypass time consuming and stressful HR processes as well as a potentially protracted and costly legal battle.
Think about perception
It’s a confidential process, but don’t for a second think that other staff won’t know about it! If you treat your exiting employee in a heavy handed way, others will know. Better to have a reputation of an employer that behaves decently and generously, even when the relationship has become difficult.
Anticipate the risks
If there’s a risk that the employee may cause harm after they’ve gone, consider the mitigations available. Existing contractual terms may be strong enough to continue to provide certain key protections, but if they don’t, new terms can be drafted into the settlement agreement to provide necessary protections.
Have a ‘plan B’ if the no fault dismissal settlement proposal isn’t accepted
Every settlement agreement has the potential to fail, so it’s normally advisable to enter into an ‘either/or’ approach to a settlement, with the alternative being the appropriate process applicable to the employee’s situation e.g. disciplinary, performance or ‘some other substantial reason.’ The less solid your grounds for a potentially safe dismissal under these processes, the more generous your settlement payment will generally need to be.
Short service employees (currently) present much less risk, and a formal settlement may not be necessary for someone with less than 2 years service (at the time of writing), but there are lots of exceptions to the ‘2 year rule’, so don’t take it for granted!
Plan well and be firm
Careful planning will ensure the employer is aware of the risks and potential responses from the employee or, in later stages, their solicitor (the process requires independent legal advice for the employee). Most employees, and their advisors, will push back on certain parts of the agreement or try to renegotiate the terms.
By anticipating the various twists and turns, employers can be ready with responses and will have the confidence to stick to their guns when necessary.
Don’t let it become personal
Easy to say, but a negotiated exit agreement is just a process, and one that plays out hundreds of times up and down the country. Where negotiations go wrong, it is normally due to employer or employee taking matters personally, and letting emotions get in the way of a sensible agreement. Good advice can help smooth matters towards a settled conclusion, but only if it’s listened to!
Help and support from Omny
Omny can draft settlement agreements & accompanying scripts and letters, can risk assess proposals and advise employers through each step of the process. A well handled settled exit can generally be delivered within the minimum 10 day time frame provided for by the legislation.