This is the third blog in our series ‘simplifying settlement agreements’ where we tackle these agreements clause by clause and give you the essential information in a nutshell. Our associate solicitor Claire Henderson explains the key aspects of references clauses and what to look out for.

Settlement agreements: can we agree on a reference?

Generally, yes. An employer will usually agree to provide a reference and set out the agreed form of reference as a schedule to the settlement agreement. There is normally a corresponding clause in the settlement agreement stating that the employer will respond to any requests (written or verbal) for a reference in accordance with the agreed form and on no less favourable terms.

What will the reference say?

The standard position is a brief statement containing factual details such as your dates of employment, job role and key duties. As this type of reference is increasingly used, whether an employee leaves under a settlement agreement or not, there is less negative inference associated with references of this type. Where applicable, an accompanying statement that it is the employer’s policy only to give a reference in this format is also helpful in this regard.

Can I negotiate the terms of the reference?

It is possible to negotiate a more detailed reference including positive or supportive comments about your performance and ability unless there have been performance or misconduct issues (because the reference must be accurate and consistent with the reason for any dismissal) or where an employer has a policy to only give factual references.

Does my employer have to give me a reference?

There is no legal requirement for your employer to provide a reference except if you are subject to regulatory requirements e.g. in the financial services sector. For some roles, there are specific rules detailing the format and type of information that must be included.

How will I know what else my employer will say about my departure?

Our simplifying settlement agreements blog on announcements explains more.

Want to know more?

If you have been offered a settlement agreement by your employer, we would be happy to guide you through the process. Our team of employment solicitors is highly experienced in advising and negotiating settlement agreements, providing specific expert advice tailored to your particular circumstances. Contact us at info@ergolaw.co.uk or on 0131 618 7007 to ensure that you are well informed and achieve the best possible deal in your circumstances.

You can also find out more about settlement agreements here or take a look at our other blogs in the simplifying settlement agreement series.

Author: Claire Henderson