What should I do after I have received a verbal offer?
A verbal offer of settlement from your employer, otherwise known as a “pre-termination negotiation”, can be made at any time. In fact any offer made, is usually capable of being treated as confidential and off the record even though there is no prior dispute, or where you were unaware of an employment problem.
By being confidential, this means you will not be able to raise the fact that you were approached by your employer and offered a sum of money to leave at any subsequent tribunal proceedings.
Your employer may categorise such negotiations as being “without prejudice”, which is the legal classification of “off the record”, but whether or not they do so, the confidential nature of the discussions will exist in most cases -whatever the timing of those discussions.
The aim of the legislation is to help employers facilitate an early exit of under -performing staff even though an employer may have not raised prior issues or gone through a prior process with an employee (such as a performance improvement plan.) Of course the ability to have such early confidential discussions can benefit the employee too, who may welcome a frank and honest approach with an offer to leave- even if it does come out of the blue.
What should you do, and how does the verbal offer process work?
- You do not have to accept the offer, or indeed any later offer. You can reject it, or request a proper performance process is followed. The ACAS Code of Practice (see below) recommends a period of 10 days for you to consider an offer.
- The provisions of pre-termination negotiations are limited to standard unfair dismissal claims only. They will not apply, for example, to discrimination cases, whistle blowing, harassment, victimisation, breach of contract, wrongful dismissal or other types of claim.
- ACAS have issued a statutory Code of Practice on Settlement Agreements, which sets out how settlement agreements should operate and also provides best practice of how pre-termination negotiations should be undertaken. The code is not binding, but employers would need to justify why they deemed it not necessary to adhere to it.
The Code also gives examples of “improper behaviour” associated with reaching a settlement, and highlights that employers should not have the protection of confidentiality in relation to an offer made where there has been “improper behaviour.” It will be up to a tribunal to decide in each case whether there has been improper behaviour which can include:-
- Putting undue pressure on you to agree an offer, for example, by saying before any disciplinary proceedings have begun that you WILL be dismissed if you don’t accept the offer;
- All forms of bullying and harassment and intimidation;
- Physical assault or the threat of it.
Although the Code recommends the 10 calendar days for an offer to be considered, it will ultimately be dependent on what is reasonable in the circumstances, and so a lesser period can be agreed.
There is no requirement that employees must be allowed to be accompanied at meetings by a colleague or trade union representative, but the Code does recommend that you be allowed to be accompanied. It is therefore a matter of good practice (but not more) for your employer to agree to this.
You will need to be careful and guarded if there is an unexpected approach by your employer with an offer for you to leave. It can be difficult to negotiate a figure upwards once you have already agreed to it (even though terms are not binding until you have taken legal advice on the settlement agreement). It is not wise to even provide the most basic signal that you are prepared to give up your employment.
Unless you consider the offer is too good to turn down, you should preferably just listen to what your employer has to say at the first meeting- without committing yourself either way.
You should then take legal advice on the offer, including the background circumstances leading up to it, so that a measured and optimum response can be given. After all, it is in your interest for the best possible settlement to be negotiated (assuming you are prepared to give up your employment). It is not in your interest to be short changed by your employer, who would usually be happy to settle at the least possible cost and in the quickest possible time.