Understanding Binding Employment Agreements and Notices

Is there a binding legal agreement?

Once you have made an offer of employment (usually in writing in the form of an offer letter) and that has been accepted by the new hire there will usually be a binding legal agreement between you even though the job is yet to start, no work has yet been done and you have yet to pay any money .

Notice?

If either party wants to pull out contractual notice will usually be required. If contractual notice is given and that notice runs out before the employment is due to start there can be no claim by either party because there is no breach of contract.

What happens when notice is given but it will expire after start date?

Employee giving notice…

If the employee refuses to start work on the commencement date where notice has still to run, they will be in breach of contract. You can sue the employee for breach of contract for any loss you can prove you suffered as a result from the start date to the date when notice would have expired. You may not have any easily quantifiable loss. The more senior or specialist the hire and the longer the period of notice still to run from the start date, the more likely that you may suffer substantial quantifiable loss.

You giving notice…..

If you decide to pull the employment after the employee has accepted your offer (unless there is some referencing issue) and you refuse to let the employee start work on the start date – where notice is still to run – you will be in breach of contract.

The loss suffered by the employee will be easily quantifiable, being the salary and contractual incentives due (although these may be harder to prove/claim) that would have been payable during the balance of the notice. If you have a contractual PILON power reserved in an employment contract you could exercise this thereby terminating the employment by making payment of the balance of the notice due after the start date (if your contract is well drafted salary only). The only possible other claim by the employee would be if discrimination or blacklisting were a provable factor in the termination.

Common Questions Answered

Why do I need a lawyer to review my settlement agreement?

UK law requires independent legal advice to be taken before a settlement agreement can become legally binding. Without it, the agreement is unenforceable. An experienced employment lawyer will ensure you understand every clause and that your interests are fully protected.

How much does it cost to get a settlement agreement reviewed?

Your employer will usually pay for you to get independent legal advice on the terms and effect of your agreement. This is standard practice and is typically written into the agreement itself as a contribution towards your legal costs.

Can my settlement agreement be improved?

Often, yes. David regularly negotiates for increases in value, better exit terms and stronger protections for his settlement agreement clients. Even where an employer presents a figure as “final”, there is frequently room to negotiate.

How long does the process take?

With David, many clients get to sign-off in a matter of days if all they need is advice and sign-off. On urgent agreements David provides a same-day service, so a tight deadline is never a barrier to getting the right advice.