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. At its simplest level, a Settlement Agreement will usually stipulate the payment of consideration by the employer to the employee in exchange for the employee agreeing to not bring claims against the employer at a later date.
The parties may also agree additional terms, such as an agreed form of reference or transfer of Company property.
The law protects the employee by stipulating that Settlement Agreements must meet certain specific criteria to ensure they are legally enforceable. One criteria is that the employee must obtain independent legal advice on the terms and effect of the agreement. Usually, the Settlement Agreement will provide that an Employer makes a contribution to the employee’s legal costs in order to obtain the necessary independent advice, which makes it binding.
Our specialist team of employment solicitors routinely advise on the content and terms detailed in Settlement Agreements. If you are an employee with a Settlement Agreement, we can negotiate terms on your behalf that are right for you and ensure that the agreement is structured in the best possible way for you.