Case study: successfully negotiating a tax indemnity clause in a settlement agreement to benefit an employee

Our employment law solicitors helped negotiate the terms within an employee’s settlement agreement, putting him in a stronger position after his employment contract was terminated.

Original settlement agreement offered by employer

Our client, Mr H instructed employment law Associate, Natalie Pring, after his contract was terminated and his employer offered a settlement agreement.

During his initial meeting, Natalie discussed the background of the case with Mr H to understand the circumstances which had led to a settlement agreement being offered. This was a redundancy situation, and a settlement agreement was offered by the company in preference of going through a proper redundancy procedure.

Negotiating new terms

Not considered unusual in these circumstances, Mr H was offered a sum of money from his employer under the settlement agreement to waive any employment claims he might have had against the company. However, after meeting with Mr H and reviewing the terms of the settlement agreement, Natalie proposed and successfully negotiated different wording to the tax indemnity clause to ensure that they had more protection should further tax be due under the agreement in the future.  Natalie also amended the reference clause to prevent the employer having the ability to amend it in the future which the client felt strongly about.

Contact our settlement agreement solicitors

When you are offered a settlement agreement by an employer, it’s important to remember that it has been drafted by the company and therefore it will naturally be in their favour. Instructing an employment solicitor to review your settlement agreement helps ensure your best interests are kept in mind and that any outcome is fair.

If your employer has issued you with a settlement agreement, our lawyers are here to help you. Call us on 0117 325 2929, or fill out our online enquiry form.