Blogs on Settlement Agreements

“Fire at will” is out, but “paying off staff” is in, as Settlement Agreements get the thumbs up.

If you are an under-performing employee or in dispute with your employer, there will soon be a mechanism in place to fast track you out of the business- but only if you agree. This follows Vince Cable’s announcement yesterday to introduce the use of “settlement agreements”, which is designed to make it easier for employers to agree terms with departing employees. Read more..

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What’s in a name? Compromise Agreements “are to be renamed Settlement Agreements.”

Major employment law changes are underway. On 23rd November 2011 the Government published its Response to Resolving Workplace Disputes intended in part to ensure that both employers and employees have greater access to resolving disputes as early as possible, and in the most streamlined way. Read more..

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Tax Treatment Of Settlement Agreements

Will you be taxed on the ex gratia payments in your Settlement Agreement?

Ex gratia payments are the non- contractual payments paid by your employer as compensation for loss of office. As a rule, the first £30,000 of the compensation will be tax free. If a Settlement Agreement offers compensation which exceeds £30,000, the sum over and above £30,000 will be taxable. This sum alone will be taxed according to your usual income tax band.

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