Settlement Agreement

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MrGreedy

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Hello fellow forum members. Some serious help please. This forum has been so super helpful on so many wide ranging topics, I thought it might be worth a try.
'A friend' has just had an unexpected, protected conversation with their boss about a settlement agreement. They've been offered gardening leave for their notice period (but to also make themselves available when required for hand overs), plus a good reference, and "this is the opportunity to leave with their reputation intact and with a reference". Not being familiar with the process my friend asked if the settlement was negotiable, and was told the offer was a reasonable settlement.
If my friend doesn't take the settlement, then it will be performance management and the boss think's there is not likely to be the step change required and performance management wouldn't be a nice process.
This has been quite a shock for my friend, as they had a feeling on Tuesday this week that their boss was frustrated with them, so on Wednesday they specifically discussed their performance with a senior company 'internal' customer and how they and their internal customers can work better to deliver more and support the business, and my friend was told that their boss's view/frustration is a bit harsh and that they're doing a good job.
The boss has put a meeting in on Tuesday next week for my friend to give a decision.
They have been employed by the company for just a few days shy of 2 years.

Any help or advice for would be appreciated and this is somewhat sensitive. I don't know where to start or what 'my friend' should do.
If anyone wants to PM me if that's more appropriate or arrange a call it would be very very much appreciated.
 
"this is the opportunity to leave with their reputation intact and with a reference" - there seems to be suggesting here that the alternative is to leave with tarnished reputation and no reference... is this really the case?

Has your friend fallen-out with his employer, or is his employer trying to 'manage him out'?
 
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Hi , You are using the word they that suggests your friend is not the only person who position is under threat.

Agree with what markjay suggested in his reply but need confirmation as to your friends employment position.

Is your friend a contractor or PAYE employee ?
 
My friend thinks personal relationships with their employer/colleagues have all be good to very good. There have been a handful of very recent very high-level conversations with their boss about different approaches to take on certain tasks. My friend assures me they have been trying to act on these brief suggestions.

It is only my friend under threat they believe, but no extra 'exits' would be discussed anyway I would assume?

PAYE employed.
 
Three other comments:

1. The boss will be judged by the KPIs that his boss set-out for him, which may or may not be aligned with the perceptions of the internal customers.

2. This happening just before the 2 years watershed, raises the possibility that the boss came to the realisation that he has to make decision whether the employee is retained or not, so might not be related to anything specific that occurred recently.

3. Before the 2 years watershed, the employer can let-go the employee with only the statutory notice period (or any longer period based on an employment contract). If the boss is making an offer that has a goodwill element, I.e. goes beyond the statutory or contractual requirements, then your friend doesn't really have much bargaining power.
 
3. Before the 2 years watershed, the employer can let-go the employee with only the statutory notice period (or any longer period based on an employment contract). If the boss is making an offer that has a goodwill element, I.e. goes beyond the statutory or contractual requirements, then your friend doesn't really have much negotiating power.
The offer is only the contractual notice period, and goes no further.
My friend says the 'this is the opportunity to leave with reputation and a reference' statement felt quite pressurising, i.e. take this or leave with no reference.
 
The decision by the company has already been made & they are offering your friend a way out with reputation intact. No use trying to hang on. Leave & put it behind him. Under 2 years, they only have to give him his notice. No redundancy payments. No negotiations.
 
The decision by the company has already been made & they are offering your friend a way out with reputation intact. No use trying to hang on. Leave & put it behind him. Under 2 years, they only have to give him his notice. No redundancy payments. No negotiations.

As above.
 
is this constructive dismissal at work? 2 yrs onwards, he would be entitled to 1.5 weeks of pay per year worked as his redundancy. i was made redundant last year even though i could have been furloughed. i was expected to "pick it up" just after the death of my mum. now in a better job.
hope your friend is ok, and may he find something quickly if he leaves
 
As I said above, leave & forget about them. The gardening leave is just today's jargon to get rid now so he cannot do any damage to the business ie deleting files, bad mouthing the company to clients or whatever. Not saying he will, but it happens.
 
Sorry to hear about your friend’s situation. How does your friend feel about it? In light of the proposal, would he still like to stay and make it work?

How large is the organization he works for? Assuming it’s large enough to have a HR function then this will have required approval by HR and a senior manager.

Usually such an agreement would only be proposed if the employer believes that the situation irreconcilable so it’s worth beating that in mind when making a decision.

Your friend must take advice from an independent solicitor, and it’s common practice for the employer to meet the cost - was this mentioned to your friend?

I wish your friend well and I hope they get the outcome which works for them. This link provides a simple summary - worth passing on to your friend.

 
First port of call is to check against the organisation's processes and that they are being fulfilled. Homework pays dividends.

Second - was there a witness to the meeting? That term 'unexpected'. Your use of the term 'unexpected' is concerning. This implies no warning and irregular process. As does the wording.

Third - be honest - is there a *tangible* performance issue and is this past the point of any remedy.

Fourth - are there any other individuals being put through this process?

Fifth - personal situaton - does your friend want to stay on - or do they have prospects elsawhere.

Sixth - your post doesn't suggest it - but is there any bullying involved? The reason I bring this up is that at one organisation I saw a pattern of 'conversations' involving departure and it centred around one senior manager who was IMO unfit to manage and misused process and intimidation to get rid of people.

As others have pointed out - the two year limit is an interesting factor.
 
Thanks Dryce. Appreciate it. Having consulted my friend, we can say the following:
The boss said there is no confidence in the employee and, paraphrasing, they won't get through the performance management process.
So at this poing, there seems little point in my friend staying at the company (and also taking into account the advice from other contributors above and having had time to reflect), so the best option seems to be to agree an amicable settlement as part of exit.
However, mortgage payments being a prime consideration, only taking the contractual notice period as the 'settlement' leaves little time to secure new work and puts them in a difficult financial situation if they can't find a new job ASAP. So, from a financial standpoint, this is almost forcing my friend into the performance management route to buy enough time to have a better chance of finding a new job.
My friend therefore needs to look at the HR policies as you suggest, and understand how long the performance management process might realistically take.
The flip side is that by the 'offer' of "this is the opportunity to leave with their reputation intact and with a reference", the implication being if they don't take the 'offer', then they will never get a reference and their reputation will be damaged/trashed.

There was no witness to the conversation, although they took thorough notes.
The might be a tangible performance issue, and my friend would welcome that being set out clearly, and having training and coaching to rectify that and work super hard to resolve it. But the framing of the conversation was that was a non-starter from the boss's point of view.
No other individuals that they know of (but that wouldn't be disclosed).
Regarding staying on, they like their work, but given what has happened it is probably in everyone's interests to leave, and other prospects are available to explore.
They don't believe they are being bullied.

They have decided, as the first steps, to ask for more time to consider the offer and give them time to take some legal advice (e.g. 5 full working days doesn't seem unreasonable).
My suggestion is that if the boss wants them out quickly and quietly, then trying to negotiate more than the bare minimum notice entitlement also seems reasonable, because if financially they feel forced to go through the performance management route to buy themselves more time, this will cost the company in terms of the additional salary (and then the notice period at the end of this), plus the time and disruption to all the other employees involved in that performance management process.
 
the implication being if they don't take the 'offer', then they will never get a reference and their reputation will be damaged/trashed
Personally, I wouldn't be concerned about that for two reasons:
  1. Many companies don't provide anything other than a bare-bones reference that concentrates only on factual information (e.g. attendance record, timekeeping, etc.) to potential future employers due to potential liability issues, including...
  2. If they gave a reference that damaged your friend's reputation (unless it were 100% factual) your friend would have recourse to sue them
They have decided, as the first steps, to ask for more time to consider the offer and give them time to take some legal advice (e.g. 5 full working days doesn't seem unreasonable).
My suggestion is that if the boss wants them out quickly and quietly, then trying to negotiate more than the bare minimum notice entitlement also seems reasonable, because if financially they feel forced to go through the performance management route to buy themselves more time
^ This is a sound approach. The bottom line seems to be that the employer wants to "get rid", so trying to salvage the employment situation in your friend's current role is a lost cause.

One point that I would make (and I'm not advising this because it takes balls to do, it will be stressful, and is a high-risk strategy) is that many employers trip up in their "performance management" process when their real objective is to find a reason to get rid of the employee and they unwittingly drift into constructive dismissal territory. If they do trip themselves up then going the performance management route is likely to be pretty unpleasant but might provide an opportunity too.
 
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