A Settlement Agreement is a legally binding agreement between an employer and an employee which governs the termination of the employment relationship on agreed terms and prevents the employee bringing claims against the employer at a later date. By entering into a Settlement Agreement the employee gives up certain legal rights usually in return for a severance payment or some other form of consideration. The law protects employees by stipulating that Settlement Agreements must meet certain specific criteria to ensure they are legally enforceable and providing these are met the Employer has certainty and peace of mind.
Settlement Agreements are a cost effective and extremely swift way of resolving disputes with minimal legal cost, disruption to business and ensures the avoidance of employment litigation. They can also be an extremely useful tool to resolve situations where the employment relationship is just not working.
Settlement Agreements are commonly used in redundancy situations where employers provide more generous exit terms than statutory payments. This provides certainty; no comeback for any technical breach of procedure once a redundancy is concluded.
Our team of Harrogate based employment Solicitors are experienced in advising on those situations where Settlement Agreements are appropriate (or not!) and the methods of offering them to employees. We can also draft an appropriate Settlement Agreement and negotiate its conclusion on your behalf.