Settlement agreement before 2 years service

Settlement agreement before 2 years service

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oyster

Original Poster:

12,864 posts

255 months

Thursday 1st June 2023
quotequote all
My wife's employer is offering a settlement agreement and wants to enter into discussion about it to end employment. Reason is insufficient skill match.
Past probation but pre 2 years service.

Notice period is 6 months.

What purpose could the employer have for this? Why not just serve notice or PILON?

Dynion Araf Uchaf

4,683 posts

230 months

Thursday 1st June 2023
quotequote all
it'll be the notice period. They don't want to pay it ( all). It may also be that the full 6 months notice takes her to 2 years? You haven't stated how long she has been at the company.

I'd therefore suggest they are not being kind, but are looking to cut their losses for as little cost to them as possible.

Also if there is insufficient skill match, they need to be showing what they have done about it.

Hold out for the full 6 months plus any holiday, but she is leaving today, and with a good reference.

oyster

Original Poster:

12,864 posts

255 months

Thursday 1st June 2023
quotequote all
Dynion Araf Uchaf said:
it'll be the notice period. They don't want to pay it ( all). It may also be that the full 6 months notice takes her to 2 years? You haven't stated how long she has been at the company.

I'd therefore suggest they are not being kind, but are looking to cut their losses for as little cost to them as possible.

Hold out for the full 6 months plus any holiday, but she is leaving today, and with a good reference.
Service to date is just shy of 18 months.

purplepolarbear

481 posts

181 months

Thursday 1st June 2023
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May be due to tax reasons - PILON is taxable - if this could be arranged in a different way via a settlement agreement then the first £30k might not be.

Andy 308GTB

2,961 posts

228 months

Thursday 1st June 2023
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Also check what happens with pension contributions.
Company Schemes can cancel them if you have less than 2 years service (personal experience from many years ago).

jonsp

946 posts

163 months

Thursday 1st June 2023
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Could it be that to bin her they're potentially willing to pay more than 6 months notice and/or relieve her from gardening leave obligations on her notice period?

If she's confident in being able to find another job fairly quickly then perhaps offering to take the 6 months but allowing her to find another job ASAP might be an option?

oyster

Original Poster:

12,864 posts

255 months

Thursday 1st June 2023
quotequote all
A small update. She's been offered 5 days paid leave to consider the settlement agreement and seek legal advice.
Never heard of that before

jonsp

946 posts

163 months

Thursday 1st June 2023
quotequote all
OK, seeking legal advice is what she needs to do.

If a company wants to end an employment relationship but don't have legitimate reasons to do so they know they'll have to pay, it's just a case of how much. The sums involved that would make a difference to your Mrs are probably quite different to the sums that would make a difference to them.

Take the leave and lawyer up. Presumably she/you are upset by this so not best placed to handle subsequent negotiations.

2 sMoKiN bArReLs

30,595 posts

242 months

Thursday 1st June 2023
quotequote all
jonsp said:
If a company wants to end an employment relationship but don't have legitimate reasons to do so they know they'll have to pay, it's
Eh?

In the first two years (subject to certain non discriminatory thingies) Its usually "sorry, it's not worked out, bye".

OP, Maybe the employer is just a decent entity who wants to go above & beyond?

SydneyBridge

9,427 posts

165 months

Thursday 1st June 2023
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I assume the 6 months notice is from either side, so takes her over the two years however it is done

Car bon

4,926 posts

71 months

Thursday 1st June 2023
quotequote all
I've worked for companies where every firm initiated termination was through a settlement agreement, regardless of length of service. The rationale was that it was just cleaner & easier. Part of the agreement is you forgoing any right to claim for unfair dismissal etc so removes a load of potential hassle. For example, any claim that you're being let go due to discrimination due to a protected characteristic isn't covered by the 2 year rule.

If the terms being offered seem fair & reasonable, then everyone is happy.

jonsp

946 posts

163 months

Thursday 1st June 2023
quotequote all
2 sMoKiN bArReLs said:
In the first two years (subject to certain non discriminatory thingies) Its usually "sorry, it's not worked out, bye".
But the 6 months notice would take her beyond 2 years. The fact she has 6 months notice suggests she's quite senior, the fact she's obviously a woman suggests she might have a discrimination claim. Something's happened here to cause them to want her to hire her in the first place and now want to bin her which we don't know/don't want to know about.

If they're a decent employer who are prepared to pay her >6 months and relieve her from gardening leave then all to the good. I was just suggesting it's a negotiation issue and the OP/his Mrs aren't the best placed to negotiate this.

2 sMoKiN bArReLs

30,595 posts

242 months

Thursday 1st June 2023
quotequote all
jonsp said:
But the 6 months notice would take her beyond 2 years.
thumbup

I didn't read it correctly!

SydneyBridge

9,427 posts

165 months

Thursday 1st June 2023
quotequote all
Employer have to pay legal costs for someone to look at settlement agreement

Wilmslowboy

4,319 posts

213 months

Thursday 1st June 2023
quotequote all
They might be just covering all the bases, just in case she has a claim on grounds of unfair dismissal (protected characteristics) ?? (Gender)



Car bon

4,926 posts

71 months

Thursday 1st June 2023
quotequote all
2 sMoKiN bArReLs said:
jonsp said:
But the 6 months notice would take her beyond 2 years.
thumbup

I didn't read it correctly!
I think you did - and were right smile

oyster said:
Service to date is just shy of 18 months.

Panamax

5,085 posts

41 months

Thursday 1st June 2023
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Take the money and run (with a decent reference).

jonsp

946 posts

163 months

Thursday 1st June 2023
quotequote all
Not sure about that - we'd need the OP to define "just shy" is it a few days or weeks? As she's still working there the time between now and her 6 months notice will likely take her over.

Any case if this ever comes before a judge the obvious question would be were you Mr Employer trying to bin her "just shy" of her gaining rights against unfair dismissal?

Muzzer79

11,060 posts

194 months

Thursday 1st June 2023
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They’re trying to avoid her reaching 2 years’ service and gaining employment rights.

Take the legal advice, that they’ll pay for, but you should be leaning towards a settlement similar to that if she had 2 years service and related rights - full notice, plus some sweetener.

abzmike

9,295 posts

113 months

Thursday 1st June 2023
quotequote all
They want her gone, and presuming they pay her notice, gardening leave or be allowed to go straight to another job - without restrictions - then I’d go. If she tried to fight just because she was 2 years and 2 days in role it would still be horrible. Take the money and run. Happened to me last year, worked out fine.