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
By entering into a Settlement Agreement an employee agrees to give up certain legal rights usually in return for a severance payment or some other form of benefit, 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 of these 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 that are right for you on your behalf and ensure that the Agreement is structured in the best possible way for you.