Employer Settlement Agreement
An employer settlement agreement is a legally binding agreement between an employer and employee which generally sets out the full terms between the two parties upon termination of employment. Once a settlement agreement has been signed by the employer, the employee, and the employee’s employment settlement agreement solicitor, it becomes binding and the employee will only be able to take the employer to a court or employment tribunal in very limited circumstances.
The employer settlement agreement will provide specific details of termination payments which may include:
✔ The Notice Period.
✔ A Tax-Free Sum.
✔ A Redundancy Payment.
✔ Holiday Pay.
✔ Any Bonus Payment.
✔ Other Relevant Sums.
Get a employer settlement agreement drafted for your business today – call 01869 325883
In return for receiving these payments as part of a settlement agreement, an employee usually agrees not to bring any legal claims against his or her employer. If a claim has already been brought, the claim must be withdrawn. Settlement agreements are one of the main ways that employees can be prevented from exercising their employment rights in an employment tribunal.
What are the benefits of a settlement agreement?
Settlement agreements are beneficial to both employers and employees. An employer will have peace of mind knowing that an outgoing employee is unable to bring any claim against them, will be bound by various confidentiality provisions, and may also be able to retain the life of restrictive covenants in the employee’s employment contract. An employee will have the security of a termination document setting out what financial settlement they will receive, alongside other aspects of their employment termination such as a job reference.
When might a settlement agreement be offered?
Settlement agreements may be offered in many situations, whether during or after employment. Some examples include as a result of a disciplinary or redundancy process. Another example is where there has been an ongoing dispute. Employers may take the view that the risk of litigation or contention is too high; therefore, a more pragmatic option will be a settlement agreement.
It may also be the case that a company prefers to ensure that the parting between it and the employee is codified in such a way as to provide clarity on exit terms. This also provides peace of mind for both parties knowing where they stand on things like post-termination restrictive covenants and confidentiality.
Get in touch with us to discuss having an employer settlement agreement drafted for your business.
Book Your Consultation
Please provide your details and an Employment Solicitor will be in touch with you as soon as possible.
Get the employment law advice you need, wherever you are.
- Telephone consultations.
- Video consultations.
- In-person consultations.
- We recommend strategies specific to your circumstances.
- We help you get the best settlement possible.
- We fully resolve your employment matter and help you move forward in a positive way.
Bicester | Banbury | London | Reading
Mon: 09:00am 06:30pm
- Tues: 09:00am – 05:30 pm
- Wed: 09:00 am – 06:30pm
- Thu: 09:00 am – 05:30 pm
- Fri: 09:00 am – 06:30 pm
- Sat: 10:00 am – 01:00 pm
- Sun: Closed
- Mon: 09:00 am – 06:30 pm
- Tue: 09:00 am – 05:30 pm
- Wed: 09:00 am – 06:30 pm
- Thu: 09:00 am – 05:30 pm
- Fri: 09:00 am – 06:30 pm
- Sat: 10:00 am – 01:00 pm
- Sun: Closed