A Settlement Agreement is a legally binding contract that waives an individual's rights to make a claim covered by the agreement. In a nutshell the employee agrees to NOT take a case to an employment tribunal or court.
The Agreement is between the Employer and the Employee.
In addition -
The agreement must be in writing
They usually include some form of payment to the employee and may often include a reference
They are voluntary
They can be offered at any stage of an employment relationship
Settlement Agreements are a legally binding agreement which can be used to end an employment relationship on agreed terms.
They can also be used to resolve an ongoing workplace dispute, for example, a dispute over holiday pay. These agreements can be proposed by either an employer or an employee, although it will normally be the employer.
Once a valid settlement agreement has been signed by both parties, the employee will be unable to make an employment tribunal claim about any type of claim which is listed on the agreement. It is paramount that this agreement is valid and up to date to reflect current Employment Law.
Important factors to note are –
Where the employer and employee are unable to reach an agreement, the settlement discussions cannot usually be referred to as evidence in any subsequent unfair dismissal claim.
Where the settlement discussions are held to resolve an existing dispute between the parties they cannot be used as evidence in any type of claim.
We can offer our expertise with reaching a Settlement Agreement
Did you know that:
For the settlement agreement to be legally binding the following conditions must be met;
The agreement must be in writing
The agreement must relate to a particular complaint or proceedings
The employee must have received advice from a relevant independent adviser, such as a lawyer or a certified and authorised member of a trade union
The independent adviser must have a current contract of insurance or professional indemnity covering the risk of a claim by the employee in respect of loss arising from the advice
The agreement must identify the adviser
The agreement must state that the applicable statutory conditions regulating the settlement agreement have been met
A point to note that perhaps there is a chance of mediation?
Failing to have a settlement agreement and depending on the nature of the dispute or problem, resolution may be pursued through performance management, disciplinary or grievance process, or mediation whichever is the most appropriate.
Our services can ensure that you have explored all options prior to issuing an agreement.
It is important that employers follow a fair process and use the ACAS Code of Practice.
Why not use an expert to avoid potentially and costly litigation?
Ending an employment relationship will no doubt be emotional. We care about both parties and deal with the process with care and compassion whilst also ensuring you are compliant with the law.
We partner with a leading Employment Law Specialist.
Additional Help We Can Offer You and Your Business
We can also offer further services such as support and counselling. We are all human beings and employers find having difficult conversations and daunting litigation scenarios stressful.
Our link to confidential counselling and support services is here to assist BOTH parties.
