Start with the alternative
Every offer is made against a background. Work out what happens if you decline.
| If the alternative is | Your position |
|---|---|
| A genuine, fairly run redundancy | You would leave with statutory terms. An enhanced offer is likely to be worth taking. |
| A performance process you expect to fail | The offer buys you a reference and money now, against months of stress. Often worth taking if the sum is fair. |
| A disciplinary with weak evidence | You have leverage. The employer is paying to avoid a process it may lose. |
| No obvious fair reason to dismiss you | Strong leverage. The employer cannot easily end your employment without the agreement. |
| An unresolved discrimination or whistleblowing complaint | The offer should reflect uncapped claims. Take detailed advice before deciding. |
Reasons to sign
- The money is certain and arrives within weeks. A tribunal claim can take a year or more and may fail.
- You get an agreed reference and control over how your departure is described.
- You avoid a disciplinary or capability finding on your record.
- Up to £30,000 of compensation is tax-free.
- You can move on.
Reasons to hold back
- The offer contains nothing beyond what you are owed anyway.
- You have a strong claim and the figure does not reflect it. See how much should I get?
- You would lose something valuable by leaving now: unvested shares, a bonus about to be paid, income protection, a pension milestone.
- The restrictions would stop you taking the job you are likely to want.
- You are being rushed, with a deadline shorter than the 10 calendar days Acas recommends.
- You want your job back or want the underlying problem fixed. A settlement agreement gives you money, not vindication.
Warning signs in the document
- Payment dates that are vague or depend on events outside your control.
- A confidentiality clause that stops you talking to your partner, a doctor or a regulator. See confidentiality clauses.
- A warranty that you have not found another job, when you have.
- Repayment of the whole sum for any breach, however minor.
- No promise by the employer in return for your promise not to make derogatory comments.
- A reference "on request" with no agreed wording.
Most of these can be fixed in negotiation.
Two mistakes to avoid
Resigning first. Until both sides have signed, there is no deal. If you resign and the offer is withdrawn, you may have lost your job and your claim.
Letting the deadline for a claim pass. If talks drag on, the tribunal time limit keeps running. Start Acas early conciliation before it expires if the agreement is not yet signed.
Making the decision
Your solicitor will tell you what your claims are worth and what the employer is likely to agree. The choice is still personal. Your savings, your health, your prospects of finding work and your appetite for a fight all count, and it is reasonable to take a fair offer even if a better one might have been won later.
Frequently asked questions
What happens if I refuse to sign?
Your employment continues. The employer must then either drop the matter or follow a fair redundancy, capability or disciplinary process. If that process ends in dismissal, you keep the right to bring a claim.
Can my employer withdraw the offer?
Yes, at any time before the agreement is signed by both parties. Offers are normally made "subject to contract".
Can I change my mind after signing?
Not normally. A signed agreement is binding. It can only be set aside in rare cases such as misrepresentation or duress.
Will I be sacked if I say no?
An employer cannot fairly dismiss you for refusing an offer. But if there is a genuine redundancy or performance issue, the employer can continue that process, and it may end in dismissal on less generous terms.
Sources
About this guide. This page is general information, not legal advice, and reflects the law and published government plans on the date shown above. Frederick George is a legal referral service, not a law firm. For advice on your own circumstances we will introduce you to an SRA-regulated solicitor.