Optional template letter to initiate settlement discussions (ACAS)
This document provides two optional template letters designed to initiate settlement discussions between an employer and an employee. One letter is for situations where no previous performance management or disciplinary action has occurred, while the other is for cases with ongoing or prior performance/disciplinary issues. Both templates propose a settlement agreement to conclude the employment relationship.
Introduction
This document includes two optional template letters to initiate settlement discussions:
where there has been no previous performance management or disciplinary action
where there has been previous or there is ongoing performance management or disciplinary action
Read more information about the letters on the ACAS website here: https://www.acas.org.uk/settlement-agreement-template.
Optional template letter to initiate settlement discussions (where there has been no previous performance management or disciplinary action)
Dear [ ]
Your employment: Confidential settlement proposal
We are writing to you because [as we discussed on insert date of previous discussion if applicable,] we have had some concerns about your conduct/ attendance/performance [delete as appropriate, and specify sufficient detail about the concerns to allow the employee to make an informed decision about his/her options].
We consider that, in these circumstances, one option is to offer you a settlement agreement to bring our employment relationship to an end, and we invite you to consider the proposal set out below.
If we are unable to reach such an agreement, then you should be aware that [delete as appropriate]
[we will next investigate these concerns further in accordance with our disciplinary procedure and then decide whether it may be appropriate to convene a disciplinary meeting [insert brief details of where the employee can reasonably access the written disciplinary procedure].]
[we will address our concerns about your performance [in accordance with our performance management procedure] and you will be encouraged and supported to improve your performance before we decide whether it may be appropriate to convene a disciplinary meeting [insert brief details of where the employee can reasonably access the written disciplinary procedure and, if appropriate, performance management procedure].]
You should note that there is no obligation for you to enter into discussions with us in relation to this proposal. Whether you choose to do so or not, please also note that any response to this letter, and any correspondence or discussions which may follow, will have no bearing on any later disciplinary [or performance management] procedure or subsequent decision taken by us, in the event that we are unable to reach an agreement.
The terms we would like to offer you are as follows [delete terms, or add further terms, as appropriate]:
[Your employment would end on [insert date which must take into account the employee’s statutory or contractual notice period, or include details of payment in lieu of notice if that is permitted by the employment contract].]
[You would receive:
[- payment of [£x] for [OR in lieu of] (delete as appropriate) wages/salary, bonus/commission, and outstanding holiday entitlements, subject to tax and NI]]
[- a [lump sum] payment of [£x] [up to £30,000]], free of tax and NI [providing further details of how this proposed sum has been arrived at may help the employee make an informed consideration of the proposal]
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England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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