Understanding Settlement Agreements in UK Employment Law

In the intricate world of UK employment law, a settlement agreement, also formally referred to as a compromise agreement, stands as a legally binding contract that typically comes into existence between an employer and an employee. This agreement serves as a blueprint, delineating the terms and conditions under which an employee consents to relinquish their right to pursue specific employment-related claims against their employer in exchange for certain benefits.

Critical elements of settlement agreements:

Understanding a Fair Settlement Agreement: A fair and equitable settlement agreement is one that delivers a just and acceptable resolution for both parties involved. It typically encompasses various components, including:

  1. Fair Compensation: Often, this involves a lump-sum payment to the employee, which may encompass notice periods, redundancy pay, and other entitlements.
  2. Reference: The agreement may specify the nature of the reference the employer will provide for the employee in future job applications.
  3. Confidentiality Clause: Commonly, settlement agreements feature clauses mandating both parties to uphold the agreement and its terms in strict confidence.
  4. Non-Disparagement Clause: This clause serves to prevent both parties from making disparaging or detrimental statements about one another.

To ensure both fairness and legality within a settlement agreement, it is advisable for both parties to seek legal counsel. This brings us to the following question:

Do Employers Bear The Cost Of Legal Settlement Agreements? Legally, employers are not obligated to cover the legal expenses of employees seeking advice concerning settlement agreements. Nonetheless, many employers opt to contribute to or fully cover these costs as part of the negotiation process. Securing legal advice is indispensable for employees to comprehend the implications of the agreement and safeguard their rights.

Do I Require a Solicitor for a Settlement Agreement? Indeed, it is imperative to engage an independent legal advisor, such as a solicitor, when entering into a settlement agreement. A solicitor specialising in employment law can furnish you with essential counsel regarding the fairness and favourability of the proposed terms. They can also assist in negotiating improved terms, if necessary.

What Occurs if I Decline a Settlement Offer? Should you decline a settlement offer, you retain your prerogative to pursue legal action against your employer. Rejecting an offer does not immediately imperil your employment, but it may lead to subsequent negotiations or potential legal proceedings. It is of paramount importance to meticulously evaluate the offer and consult with a legal expert prior to making a decision.

Is a Settlement Agreement a Prudent Choice? The wisdom of entering into a settlement agreement hinges on your unique circumstances. Such an agreement can proffer advantages such as a swift resolution, financial compensation, and the avoidance of protracted legal battles. Conversely, it entails relinquishing the right to bring certain claims before an employment tribunal. Before making a determination, it is crucial to confer with an experienced employment law solicitor who can furnish personalised counsel tailored to your situation.

In summation, settlement agreements wield substantial significance in the realm of UK employment law, offering a mechanism for employers and employees to amicably resolve disputes. If you are contemplating a settlement agreement, getting legal advice is paramount to guarantee that the terms are equitable and advantageous.

If you require expert guidance, you can reach out to our Employment Solicitor Matthew Brain here at Optimal HR to obtain professional assistance custom-tailored to your specific needs. We are committed to supporting you in addressing workplace issues, including unfair dismissal and discrimination.

Blog written by Mel Stead FCIPD, Managing Director of Optimal HR Services who has 30 years’ experience in HR and employment law matters.

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National Minimum Wage Increases From 1st April

The rates for the national minimum wage will increase on 1 April 2023. The hourly rate of the minimum wage will increase from:

  • £9.50 to £10.42 for workers aged 23 and over (the national living wage);
  • £9.18 to £10.18 for workers aged 21 or 22;
  • £6.83 to £7.49 for workers aged 18 to 20;
  • £4.81 to £5.28 for workers aged under 18 who are no longer of compulsory school age; and
  • £4.81 to £5.28 for apprentices under 19, or over 19 and in the first year of the apprenticeship.

Employers should check their pay rates against the forthcoming minimum wage rates and ensure that, where necessary, they increase remuneration for the first pay reference period beginning on or after 1 April 2023.

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I have just received an employment tribunal claim, what should I do?

Melanie Stead, Managing Director of Optimal HR Services
17th August 2022

If you have just been served with an employment tribunal claim, don’t panic. There are a few things you need to do in order to prepare for your case.

First, you need to seek legal advice from an Employment Solicitor. Make sure you need to read through the claim carefully and make sure that you understand it. If there are any parts that you are unsure of, make sure to ask your solicitor for clarification.

Next, you need to start gathering evidence that will support your defense. This may include documents such as performance reviews, emails, or text messages. If you have any witnesses who can attest to your character or the events in question, make sure to get their contact information as well.

Finally, start preparing your arguments. Work with your solicitor to come up with a strong defense that will give you the best chance of winning your case.

If you follow these steps, you will be in a good position to defend yourself against an employment tribunal claim.

Our in-house solicitor Matthew has over 30 years of experience in managing employment tribunal claims and can provide you with the advice and support you need through your claim. Give us a call on 0330 0881857 or email Matthew@Optimal-hr.co.uk and we will arrange a time to call you to discuss how we can help.

You can find out more about our legal services on our website.

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Is Covid sending employment tribunals viral?

As was always expected by anyone working in employment law, legal cases caused by the Covid pandemic are on the rise.

Today, we are reporting on the results of several notable cases to reach court since the pandemic began, highlighting the pitfalls and ‘what NOT to dos’ for business owners and HR specialists to consider.

Fears do not automatically equate to funds

From heightened anxiety to shielding the vulnerable, many employees felt compelled to avoid work when the pandemic originally took hold. Now, several claims for unfair dismissal later, we consider how each one played out in the courtroom and what their results mean for employers moving into a so-called post-pandemic era.

The first comes from a recent Guardian article, which tells of a woman who insisted her fear of Covid forced her to stay home. Not an issue for her, perhaps, although it was indeed viewed that way by her employer when she repeatedly failed to show up for work.

The woman – who remains unnamed (as does her employer) – claimed discrimination on the grounds of her bosses forcing her attendance at work when the pandemic was a danger to public health. The fear of catching the virus was so intense, said the claimant, she was forced to protect herself and others. Her employer disagreed and stopped her pay. The court found in favour of the defendant and stated while her fear was indeed real, the woman had no right under the Equality Act 2010 to receive compensation.

Personnel Today reports on several cases where Covid has caused employee grievance to the point of legal proceedings.

In one such case, Rodgers vs Leeds Laser Cutting Ltd, employee Mr Rodgers claimed he could not work as he did not want to risk catching and infecting his young children. After texting the firm to explain his absence, his employment was terminated – leading to his claim for unfair dismissal.

After the court heard about the employer’s multiple attempts to minimise the risk of Covid spreading – including social distancing, reduced employee numbers and enhanced cleaning – the court found in favour of the defendant, citing their right to expect the physical attendance of their employee at work.

What about when it’s the vulnerable people at risk?

Some cases – such as Gibson vs Lothian Leisure – have proved in favour of the plaintiff. Here, Mr Gibson – a chef – was placed on furlough and then later asked by his employer to return to work to help prepare for the facility reopening to the public. Gibson voiced his concerns on feeling unsafe about the state of the premises at that time (and the potential impact on his shielding father was he to catch the virus); his employment was then terminated. The jury found Gibson was unfairly dismissed as the employer could not demonstrate any increased safety measures on the premises. Gibson received a payment of circa £24,000.

Furlough: an employee’s right?

Wrong. In fact, many cases have arisen from a misconception the worker is legally entitled to furlough over continuing to work, with Woods vs Hawkes Ltd and Kapetanakis vs Historical Souvenirs Ltd among them. Each time, the court has found in favour of the employer.

Yet when an employer has opted for redundancy instead of furlough, the result has been quite the opposite. Take Mhindurwa vs Lovingangels Care Ltd, where the plaintiff was never offered furlough but simply made redundant. The legal team acting for Mhindurwa argued this was unfair since furlough would have ensured their client’s position was ongoing.


Many claims occurred during the early stages of the pandemic when we knew little about the virus and its potential ongoing impact. Of course, now armed with more intelligence than we were in mid-2020, employers are likely in a better place to deal with employee issues reasonably. Understanding employment law is always advisable to avoid an unexpected court summons, and we highly recommend seeking expert advice from a professional.

In need of some HR or employment law advice? Wherever you are in the UK, you can arrange a chat with one of our friendly professional HR Advisors or our in-house Employment Lawyer at any time.

 Call us on 0330 0881857 or email enquiries@optimal-hr.co.uk

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The Do’s And Don’ts On Withdrawing An Offer Of Work

Ahh. The relief when you’re recruiting and you finally have that ‘YES!’ feeling about a candidate – particularly when you’ve been trying to fill the vacancy for some time and constantly coming up with square pegs for a round hole.

Yet, before you go rushing toward the paperwork preparation – or even provide a verbal offer to the candidate – it’s time to stop for a second. There are several things to consider before you hand over an employment contract; at least, if you’re wanting to ensure the hiring process runs smoothly with both parties – employer and employee – clear on the expectations moving forward.

Our HR specialists are often asked about the protocol when making an offer of employment and whether it can later be withdrawn. The answer is simple: it depends on how your offer was structured in the first place. Time for a reminder, then, of the key considerations when you’re hiring someone new into your organisation and best practice for a written offer of employment.

Conditional work offers

This type of offer is exactly as it sounds: an offer, but with some conditions attached. It’s more than fair to provide a conditional offer to your new employee, and we would encourage that this becomes standard to your hiring process. Here are a few conditions to consider including along with your offer of employment:

References – it is very much expected for a recruit to provide two references – at least one from a former employer – before you take them on, giving you confirmation they are who they say they are and have the skills necessary to fulfil the role on offer. A personal reference is also useful when it comes to accessing a candidate’s character.

DBS checks – if the position involves working with vulnerable or younger people then this type of tick in a box is often compulsory to the role, and something you have likely already checked during the early stages of the recruitment process. Still, it is a good idea to include it as part of your final stage checks in case you need a backup.

Medical checks – does your vacancy warrant a level of fitness to perform the role effectively? Or, is the role a senior one within the company? Either way, you might want to consider including medical checks as a condition to prevent hiring someone physically or mentally unable to fulfil the role’s tasks.

Proof of qualifications – this is fundamental to many positions, particularly where you are hiring for a senior or mid-entry level role where often the expectation and salary are based on the skills and experience a candidate brings to the table.

Proof of right to work – people applying for work in the UK should be in the correct legal position to do so, which means having British citizenship or a visa allowing them to reside and work in the UK (since Brexit, which took effect on January 1, 2021, the latter now applies to any new EU citizens arriving into the UK to work).

Unconditional work offers

If you made an offer without conditions then you are still entitled to withdraw your offer but only before your new hire has accepted the contract.

Once an offer of employment is accepted, your proposed hire can claim ‘breach of contract’ if you later withdraw. A claim can include their seeking losses incurred for resigning from their current role, with damages or compensation to match your company’s standard notice period (typically, at least one month’s pay – three months for senior roles). Depending on the reason you give for the withdrawal, a candidate may also look to seek compensation based on discrimination if they feel inequality has come into play.

It’s best not to leave things to chance when recruiting new hires. Make sure all parties know where they stand from the outset to avoid a potentially sticky situation later on.

In need of some HR advice? Wherever you are in the UK, you can arrange a chat with one of our friendly professional HR advisors at any time.

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Care Workers’ Rights While Sleeping Over – The Rules On Pay

Care workers are being denied access to the National Minimum Wage for their hours spent asleep during an overnight shift.

In March, a court ruled in favour of learning disability charity Mencap, dismissing claims brought by two of its former employees they were entitled to the minimum wage while asleep, instead, favouring the employer’s defence to pay only the statutory amount during their hours awake.

The ruling brings a five-year battle between Mencap and Clare Tomlinson-Blake – later, joined by a second claimant, John Shannon – to a close, clearing the company of any rights to repay the former workers earnings missed during their tenure and setting a precedent to all UK-based care homes moving forward.

Care providers nationally are celebrating the result, which provides absolute clarity as to how their care workers are compensated, an area previously dowsed in uncertainty. It also secures the financial situation for many facilities; had the workers’ claims been successful, the estimated bill for care homes stood at £400 million, a figure Mencap suggested would have caused severe financial implications for larger organisations like theirs while bankrupting countless smaller ones.

It’s less celebratory for care workers such as Tomlinson-Blake, who feels others like her should be compensated fairly for overnight shifts, whether they’re awake or asleep, with staff available in emergencies and therefore ‘working’ to protect society’s most vulnerable.

It falls at a particularly difficult time for many within a sector already famed for its unattractive rates of pay, with care workers under increasing pressure during the Covid-19 pandemic, forced to work for longer hours in an environment where exposure to the virus has been much greater than it has elsewhere.

Before her original court-hearing in 2017 – when Tomlinson-Blake first raised a claim against Mencap – care workers were paid a flat rate of £35 for night-shifts. After that hearing, it was suggested workers be paid by the hour, and at the national minimum wage rate, in effect doubling their pay to around £70 per shift. Yet a ruling for employers to provide the pay gap in back payments for up to six years announced at the same hearing was later reversed, giving a green light to employers to revert to their original lesser flat rate of pay – something that looks unlikely to change in the wake of the latest ruling in March.

Others, however, are choosing to pay their staff at an increased rate regardless of the guidance and one they feel equates to the value each employee brings to their role. It’s a trend the Voluntary Organisations Disability Group (VODG) hopes will eventually extend wider, as they call on the government to establish a standard fair rate of pay for all overnight care workers, preventing further damage to the sector in the wake of the recent court ruling.

In need of some HR advice? Wherever you are in the UK, you can arrange a chat with one of our friendly professional HR advisors at any time.

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Government Launches Modern Slavery Statement Registry

On Thursday 11th March 2021, The Home Office launched a modern slavery statement registry online, to provide a platform for organisations to share the positive steps they have taken to tackle and prevent modern slavery.

The registry will enhance transparency and accessibility, by bringing modern slavery statements together in one place and will make it easier to find and compare them.

It will allow users such as consumers, investors and civil society, to search for statements and scrutinise the action organisations are taking to identify and address modern slavery risks in their operations and supply chains.

The registry follows commitment from the government to strengthen the reporting requirements under section 54 of the Modern Slavery Act 2015, following the Transparency in Supply Chains Consultation, and publication of the world’s first Government Modern Slavery Statement in March 2020.

All organisations are strongly encouraged to submit their most recently published statement on the registry to demonstrate that they have reported.

If your organisation is required to produce a statement under section 54 of the Modern Slavery Act, in future it will be mandatory for you to submit your statement to the registry as part of the proposed changes to strengthen the reporting requirements to the Act. These measures require legislative change and will be introduced as soon as parliamentary time allows.

To lead by example, the government has submitted the Government Modern Slavery Statement on the registry today.

Learn more about the registry and find out how to submit a statement.

What can you do if an employee refuses to return to work from being furloughed?

The UK government announced on the 11th May that those who cannot work from home should start to return to work if their business has reopened.

Concerns are now being raised by employers on how to handle situations where employees are refusing to return from being furloughed or from being absent due to illness.

Under normal circumstances if an employee fails to attend work this could be grounds to follow the disciplinary process with a potential for dismissal. However, under  present circumstance’s employers need to be very careful about applying this approach.

From a legal perspective, an employee cannot be placed in a  detrimental position for refusing to return to the workplace where they have genuine  serious health and safety concerns.

So how do you deal with this as an employer?

It’s important to treat every concern seriously and ensure that all mitigating actions are reflective of everyone’s individual situation.  All employers need to be able to evidence that they have;;

  • Implemented and communicated the governments guidelines to minimise the risk, including providing any protective equipment necessary to keep employees safe. This will be entirely dependent upon the role and the building they work within.  Communicating this to employees is critical to the success of supporting employees return to work.
  • Considered the wellbeing of all employees. Employers may wish to consider holding a well-being interview prior to employees returning to check the physical and mental well-being of their employees.  Remember, lockdown and COVID-19 has impacted everyone in different ways and it’s important to understand how it has impacted each employee individually by giving them the opportunity to discuss their well-being and any concerns they have.
  • Considered all flexible working options. Employers must remember that many people may still have caring commitments to children or other family members who are still shielding.

Once an employer has gathered all the relevant information they  can then make an informed decision as to whether the refusal is reasonable or not.

Consideration should also be given to issues raised by an employee relating to any serious health and safety concerns which may give them  whistleblowing’ protection.

If you are in need of any support or guidance on how to safely and effectively support employees returning to work, or if you would like support or training on conducting well-being interviews before deciding whether to bring employees back to work then call us on 01422 897152 or email enquiries@optimal-hr.co.uk

2020 brings changes to employees “Statement of Terms”….Are you ready?

Employment Law changes for 2020, are you ready for them?

One of the biggest changes is to “Statement of Terms”

We have seen many of our new client’s previously being quoted thousands of pounds for employment documents. Our team of HR Consultants have over 55 years of experience between them which means all the experience and expertise of your own HR team or a solicitor’s firm but without the high cost.

We provide outsourced HR support to Start-ups and SME’s right through to large PLC’s meaning you can have a HR team whenever and wherever you need it without having to build a team internally. HR outsourcing is approximately 33% cheaper than running your own in-house team and around 50% cheaper than using law firms.

For employers taking on staff, we can support you with ensuring that all your employment documents are in order so you can focus on running your business. If you are already employing people, when did you check that all your documents were up to date and fully compliant with employment law?

From 6th April 2020, all employers must provide a new employee with what’s called a statement of particulars from the date they start employment. To most people this is known as an employment contract. It is a legal requirement to ensure staff have a Contract of Employment along with an Employee Handbook which would usually contain your companies HR policies and procedure amongst other. Remember, they must have these from day one!

For a free confidential chat about employment contracts, handbooks or any other HR support give us a call on 01422 897152 or email enquiries@optimal-hr.co.uk

Keep an eye on our Company website for our upcoming blogs over the course of this week on all employment law changes in 2020.