Is 48 hours enough to decide whether or not to accept an offer of settlement?
In Gallagher v McKinnon’s Auto and Tyres Ltd [2024] EAT 174, the Employment Appeal Tribunal (EAT) confirmed that, on the facts, 48 hours was sufficient.
In this case the EAT held that an employment tribunal was entitled to find that discussions conducted with a view to ending Mr Gallagher’s employment on agreed terms were inadmissible in his claim for unfair dismissal. Section 111A of the Employment Rights Act 1996 guaranteed the confidentiality of the discussions, and the tribunal found there was no improper behaviour on the part of McKinnon’s.
Importantly, the tribunal concluded that the employer’s decision to make a verbal offer during a meeting about Mr Gallagher’s return to work from sickness absence, and to give him only 48 hours to consider it, did not amount to undue pressure. The tribunal also rejected the argument that dismissal was implied if he did not accept the offer.
This sits interestingly alongside ACAS guidance, which recommends that employees should normally be given 10 calendar days to consider a settlement agreement and obtain independent advice. It is important to remember that ACAS guidance is not legally binding, it does not have the force of law.
It is also relevant where an employee, even while on sick leave, chooses to respond with a counter-offer settlement offer. Doing so can show that they were able to engage with the process and consider their options, and it may weaken any later claim that the original timeframe was unfair. At the same time, a counter-offer reframes the discussion into a negotiation, which can support an employer’s argument that the process was conducted voluntarily and fairly.
For employers, this case provides reassurance that shorter timescales for accepting a settlement offer will not automatically be considered unfair. The decision demonstrates that what is “reasonable” will depend on the circumstances, and tribunals will look closely at whether an employee was placed under any undue pressure. Ultimately, its fact specific! However, it does not give carte blanche to impose unreasonably tight deadlines. Each situation must be assessed on its own facts.
If you are considering offering a settlement agreement in return for ending employment, or are faced with an employee making a counter-proposal to an initial settlement exit offer, take employment law advice.
