SETTLEMENT AGREEMENTS
A Settlement Agreement (formally known as a Compromise Agreement) is a legally binding contract made between an employee and employer.
A Settlement Agreement (formally known as a Compromise Agreement) is a legally binding contract made between an employee and employer.
This usually provides for a severance payment by the employer in return for your agreement not to pursue any claims in a Tribunal or a Court. The employer will usually require you to keep the terms, for example the amount and the surrounding circumstances of your contract’s termination, confidential.
These agreements must be drafted in a very specific way in order to ensure that they are binding on the employee. The employee has to receive independent advice before signing and generally the employer will pay a reasonable contribution towards the cost of that advice.
Commencing settlement discussions can be a sensitive matter and if you as an employer initiate them, it is important to do so in such a way that ensures if talks break down, they cannot be used against you. In appropriate cases, employers can benefit from ‘without prejudice’ status or from having a ‘protected conversation’ – although each has its limitations.
We advise on:
- When to offer a settlement agreement
- ‘without prejudice’ and ‘protected conversation’ status
- Appropriate terms to propose
- Drafting settlement agreements and negotiating terms
- Compromising tribunal proceedings
Read our blog here on the benefits of a Compromise Agreement.
Contact our specialist team on 01792 468684 or email enquiries@pgmsolicitors.co.uk for further advice.