Settlement Agreements (previously known as compromise agreements) are a useful tool for ending employment relationships on mutually agreed terms.
Settlement Agreements have often been used in situations where;
a) There is a potential redundancy situation
b) There is a potential dispute or performance issues with an employee or
c) There are personality clashes between an employee and an employer
d) Either the employee or the employer can propose an agreement.
A Settlement Agreement, as with any contractual agreement, has to provide some sort of consideration to the employee and so the standard traditional Settlement Agreement would provide an amount of compensation to the employee. In return the employee will waive their right to bring any claim against the employer. The benefit of this agreement is that it provides certainty for the employer and an additional sum of money for the employee.
An agreement must be certified by a Solicitor.
Generally, under the terms of the Settlement Agreement, the employer will pay for the employee to be able to see a solicitor in order to take advice on the agreement.
We are happy to act for any employee or employer and can assist in drafting a Settlement Agreement or in advising an employee on the terms of the agreement.
If you have any questions or would like any further information please contact our Litigation Department.