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When can I use a settlement agreement?

Settlement agreements are legally binding contracts which can be used to end an employment relationship on agreed terms. They can also be used to resolve an ongoing workplace dispute and can be an effective way of ending an employment relationship. They are entirely voluntary and neither employers nor employees have to enter into them if they do not wish to do so, or they are unhappy with the proposed content.

Settlement agreements can be a very effective way of managing exits from a school, whilst also managing the risks involved.

By offering a settlement agreement to an employee you are effectively buying off the risk of a claim. A settlement agreement can also a useful way to bind exiting employees to additional provisions on confidentiality and post termination restrictions, where necessary.

Employers need to be very careful when discussing potential settlement with employees, as a poorly managed conversation can in itself trigger claims. For further information on how to conduct these conversations, please see: Guidance on holding protected conversations in the document section.

You also need to be mindful that you must comply with the Academies Financial Handbook if considering making a payment under settlement agreement, particularly if any non-contractual element exceeds £50,000.

What does a settlement agreement need to contain?

In order for settlement agreements to be binding it is essential that the document is properly drafted and sets out the agreement between the parties accurately. A settlement agreement that does not comply with the legislative requirements is very unlikely to be enforceable.

Drafting settlement agreements is included within the fixed price for our retainer clients.  For all other schools we’d be happy to undertake this work for an agreed fixed price.  In order to put together the settlement agreement, we’ll need certain information from you. Please contact us and we’ll explain the information we need from you.

What if there are safeguarding issues relating to the employee?

You should seek legal advice on this issue, as you need to be particularly careful about entering into a settlement agreement where there are potential safeguarding concerns.

This may also be a child protection issue. Depending on the circumstances, it may not be lawful to enter a settlement agreement in view of the duties under the Children Act 1989 to protect and safeguard the welfare of children.

The statutory guidance issued by the Department for Education “Keeping Children Safe In Education” states that schools must safeguard and promote the welfare of children and deals specifically with allegations made against teachers and other staff, and sets out the duties of employers and employees in this context. It also addresses issues such as confidentiality and also managing exit arrangements (including resignations and settlement agreements).

Allegations of serious misconduct against a teacher may be referred to the Teaching Regulation Agency (TRA). All employers of teaching staff in schools, including an employment or supply agency, have a legal duty to consider whether to refer a case to the TRA when they have dismissed a teacher for misconduct, or would have dismissed them had they not resigned first. Additionally all schools must make a referral to the DBS if a member of staff has harmed, or poses a risk of harm to, a child, and has therefore been removed from working (paid or unpaid) in regulated activity, or would have been removed had they not left. Referrals should be made to both the DBS and the TRA in cases where there is alleged serious teacher misconduct involving harm or risk of harm to a child.

Again, we’d recommend specific advice is taken in relation to any concerns you may have.

How do I accept a resignation?

It is not up to the employer to “accept” an employee’s resignation, or otherwise- it is up to the individual to resign and inform the employer that this is the case. However, a resignation should be acknowledged by the employer and a letter confirming arrangements should be sent to the employee.

When accepting a resignation, schools should have regard to the Burgundy book which specifies what notice periods a school is entitled to receive from a teacher.

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