Financial settlement checklist

When contemplating whether to negotiate a settlement with a departing employee, you should consider the following:

1. Proceed with caution!
   • You must be very careful when you are making the offer, especially if the employee has not yet been dismissed as it could amount to a fundamental breach of contract and entitle the employee to resign and claim constructive unfair dismissal. You should attach “without prejudice, subject to contract and pursuant to S.111A Employment Rights Act 1996” to any conversations or correspondence on the offer, but note that the “without prejudice” rule will only apply if there is a genuine dispute and the law on “protection conversations” only applies to unfair dismissal claims, not discrimination or whistle blowing claim. If the offer is made before or during any relevant procedure you should make it clear that this is an alternative resolution and that you will follow due process if the offer is rejected.