Sometimes, and for various reasons, employers want to end a particular employee’s employment. A Settlement Agreement lets the employment be terminated on particular terms. These terms can be agreed between the employer and employee.
The main purpose of a Settlement Agreement is to:
Advantages to the employer are:
A Settlement Agreement can also deal with references.
Employees can be offered a Settlement Agreement before or after employment has been terminated.
All Settlement Agreement offers should be made “without prejudice”. This means discussions between employer and employee will be off the record, subject to limited exceptions (such as the employer acting unreasonably or discriminatively).
The law requires a Settlement Agreement to be in a special format. We can check that the Agreement is correct. The law also requires that the employee receives advice from a solicitor (or other appropriate adviser) about the Agreement’s terms and effects. By signing the Settlement Agreement the employee will give away his or her rights to bring claims against the employer.
Usually the employer agrees to pay a specific contribution to the employee’s legal fees for seeing a solicitor to sign the Settlement Agreement.
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