Our employment solicitors have considerable experience in advising on the use of settlement agreement, the drafting and negotiating the terms of a settlement agreement for all levels of seniority.
Settlement agreements are a common method of ending the employment relationship and it is a record in writing of the terms of any settlement reached between the parties. There may have been a dispute or ongoing claim a the employment tribunal that the parties wish to resolve by way of a settlement agreement or that as an employer you are considering making an enhanced payment to an employee and wish to protect your position.
A settlement agreement will typically cover such key matters as:
- The amount of any settlement payment (generally the first £30,000 of compensation payment (which includes any redundancy payment) is tax exempt) and when it is payable.
- The claims which are being waived
- What Reference (if any) is given
- Confidentiality
- Announcements regarding departure
- Return of company property
- Restrictive covenants
For a settlement agreement to be binding, the individual who is entering into the agreement will be required to take legal advice on the terms and effect of the agreement. It is common practice for the employer to make a contribution towards the employees cost.
Employers are now able to have a ‘protected conversation’ in which to discuss an offer which an employer may wish to make. The idea behind having a ‘protected conservation’ is for both parties to be able to have a frank discussion about the termination of an employee’s employment, without the risk that that ‘protected conversation’ is subsequently referred by either party, should a claim for unfair dismissal be issued. There are however caveats and a ‘protected conversation’ is not protected and therefore can be relied upon in certain claims, including claims discrimination. In these circumstances the parties may be able to discuss settlement of a dispute or anticipated dispute on ‘without prejudice basis’.
If matters cannot be resolved between the parties, it may result in the individual commencing ACAS Early Conciliation and ultimately a claim in the employment tribunal. Our employment team are on hand to advise and deal with matters on your behalf in order to achieve the best possible solution.
If you require employment advice, then please do not hesitate to contact us by telephone to speak with a solicitor from our employment team, without obligation, or simply fill out our enquiry form and one of our specialist employment lawyers will contact you.
