Q&As

If, when advising on a settlement agreement, a solicitor becomes aware that the settlement agreement gives a misleading position as to the post-employment notice pay (PENP) calculation, in order to avoid or reduce a tax liability, must the solicitor refuse to sign the adviser’s certificate?

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Published on LexisPSL on 16/01/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • If, when advising on a settlement agreement, a solicitor becomes aware that the settlement agreement gives a misleading position as to the post-employment notice pay (PENP) calculation, in order to avoid or reduce a tax liability, must the solicitor refuse to sign the adviser’s certificate?
  • Conditions regulating settlement agreements
  • Post-employment notice pay (PENP)
  • Tax evasion facilitation

If, when advising on a settlement agreement, a solicitor becomes aware that the settlement agreement gives a misleading position as to the post-employment notice pay (PENP) calculation, in order to avoid or reduce a tax liability, must the solicitor refuse to sign the adviser’s certificate?

Conditions regulating settlement agreements

In order for a settlement agreement to be binding and valid to settle statutory employment claims, it must comply with certain conditions regulating settlement. One such condition is that the employee or worker must have received advice from a relevant independent adviser as to the terms and effect of the proposed agreement, in particular as to its effect on their ability to pursue their rights before a tribunal (see, for example, section 203(3)(c) of the Employment Rights Act 1996).

Only advice on the terms and effect of the settlement agreement is required in order for the settlement agreement to be valid (McWilliam v Glasgow City Council),

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