A Settlement Agreement is a legally binding contract made between an employer and an employee. It can be used to resolve an ongoing workplace dispute or to end an employment relationship on agreed terms.
Under the terms of a Settlement Agreement, an employee will waive their individual legal rights (contractual and statutory) to bring a claim in an Employment Tribunal or Court against their employer in return for a termination payment (which may include notice pay, redundancy pay, an ex gratia payment and other sums.)
Once a valid settlement agreement has been executed, the employee will be precluded from pursuing a complaint in the employment tribunal claim or court about almost all claims relating to their employment. It is for this reason that an employee must seek independent legal advice on the terms of the agreement, usually from a Solicitor, before the agreement can become binding. The Solicitor will also need to certify that they have provided such legal advice to the employee.
The terms of a Settlement Agreement can appear extensive and confusing. At Thackray Williams LLP we take the time to carefully advise our clients on any potential legal claims they will be waiving when entering into the proposed Settlement Agreement documentation. We regularly negotiate on behalf of our clients achieving increases in their compensation and further, in ensuring that they have better protection under the terms of the Settlement Agreement, which includes matters such a post-termination restrictions and references.
Thackray Williams LLP has extensive experience in advising both employers and employees on Settlement Agreements. If you do need any assistance in this regard, or in relation to any other employment matter, please do not hesitate to contact a member of our Employment Team on 020 8290 0440.