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4. Negotiating a settlement

Released 8th May, 2012|1,608 Views

If there seems to be a chance of negotiating a deal with the employer, it may be worth sending a ‘without prejudice’ letter before sending in the tribunal Claim.

If a letter is a genuine attempt by you to try to resolve the dispute you have with your employer, writing the words ‘without prejudice’ at the top of the letter makes sure the tribunal does not see the letter if negotiations fall through and the case goes ahead.

The ‘without prejudice’ letter can be written by the worker or, if she has a representative acting for her, by her representative.

Alternatively, negotiations can be carried out verbally or through an ACAS conciliation officer.

Working Families may also be able to arrange free mediation in appropriate circumstances. At a mediation meeting an independent mediator facilitates a meeting between the worker and their employer with the aim of achieving an acceptable outcome. It can be extremely effective, particularly so where it is used in the early stages of a dispute.

Where a settlement is agreed through an ACAS Officer, either before a case starts or, more usually, during the course of a case, the ACAS Officer will write out the agreement on a ‘COT 3’ form. Any agreement made through ACAS, even verbally, is binding and prevents the worker running a tribunal case on the matters which have been settled.

Where ACAS is not involved, the employer will want any settlement set out in a written ‘compromise agreement’. This also has the effect of being a binding settlement. A compromise agreement must contain certain wording and the Claimant must have been advised by a solicitor, barrister or other authorised person. Where a Claimant negotiates an agreement direct with the employer, the employer will often be willing to pay in the range of £250 - £500 for the worker to take advice from an independent solicitor who can sign and advise on the compromise agreement. Some agreements require the Claimant to warrant (promise) that they have not discussed the complaint with anyone else. It is therefore best for the Claimant to avoid discussing their work situation with anyone apart from their close family
 
The advantages of a negotiated settlement are:

  • It avoids the stress of running a case and going through a hearing.
  • It provides a quicker outcome.
  • The worker is more in control of the result. There is no guarantee the worker will win their tribunal case, however badly they have been treated.
  • The worker can ask for things which the tribunal does not have power to order even if they win, for example an agreed reference (as well as financial compensation).
 
Some tips and tactics when negotiating a settlement, whether at an early stage or later during the case:
 
  • The usual way to decide how much the Claimant is willing to settle for is a combination of working out roughly what a tribunal would award if s/he won their case, and considering how strong the case is. Another way to look at it is to settle on a period of loss of earnings.
  • When negotiating, never start with the lowest figure the Claimant will settle for. The employer will expect the Claimant to compromise on what they originally ask for.
  • If the Claimant starts with a low figure, they will end up with an even lower one. On the other hand, if they start with an unrealistically high figure, the employer may refuse to negotiate altogether.
  • Similarly, employers do not usually start with their highest offer and will usually offer something a bit higher if the Claimant negotiates. Having said that, some employers can be very rigid and refuse to increase their offer at all.
  • It must be clear to the employer that the Claimant is prepared to go ahead with a tribunal case if no settlement is reached. If the employer believes the worker is not going to take a case anyway, they are unlikely to be offered anything.
  • The Claimant should be firm but not antagonistic in the tone of any letters they write or conversations they have. If the Claimant upsets the person they are negotiating with, they are less likely to get a good deal.
It is essential that tribunal time-limits are kept in mind when conducting any negotiations before starting a Claim. It is no excuse for missing a tribunal time limit that the Claimant thought their case was about to settle. However close to a final agreement, the Claimant must not fail to lodge their tribunal Claim within the time limits. 

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