Settlement Agreements

What is a Settlement Agreement?

Formerly known as a Compromise Agreement

This is a legally binding agreement which is considered a mutual agreement between the employer and employee. It is provided in lieu of termination of employment either by reason of redundancy by agreement or in settlement.

Employers are frequently using compromise agreements as a method of preventing potential future complaints to a tribunal, especially in redundancy situations.

Why would an Agreement be necessary?

An employer can only protect itself from an employee bringing a complaint to a tribunal after redundancy or a dismissal by having them sign away their right to do so in a Settlement Agreement. This can only really be done in a Settlement Agreement and has the effect of turning the redundancy package, or potentially unfair dismissal settlement offer, into a “full and final” settlement of any claims the employee has against the employer. Likewise, if there have been any internal grievances or disciplinaries then a Settlement Agreement can ensure a swift resolution without any come back for either the employer or the employee.

Why would the Employee need to see a Solicitor?

For a Settlement Agreement to be binding the employee must be advised as to its contents. The Employment Rights (Dispute Resolution) Act 1998, provides that such advice can only be given by a qualified lawyer, a qualified trade union official, or a qualified advice centre worker, all of whom must be covered by an appropriate certificate of indemnity insurance. The lawyer will advise the employee on whether the terms of the Settlement Agreement offer sufficient protection and should also advise on the level of compensation which would be reasonable in the circumstances. This is calculated by the number of years the employee has worked, the salary and most important of all, the reason for the termination, dismissal or redundancy.

An employer will also be required to contribute to the employee’s reasonable legal costs and this will be stated in the Settlement Agreement terms.

Why choose us to advise you on the Settlement Agreement?

A City Law Firm Limited can draft tight and comprehensive Settlement Agreements and handle all negotiations on your behalf. We make the potentially laborious process of reaching a settlement swift and stress free. We also have a successful track record of negotiating Settlement Agreement terms, settlement sums and favorable references on the employee’s behalf.

Whether you want a Settlement Agreement or already have a draft Settlement Agreement give us a call for an initial chat.

Our approach:

Our specialist employment team understand the need for swift, frugal advice with the ultimate goal to settle and avoid costly tribunal hearings. Whether it’s advising on a document, defending or issuing a claim or negotiating a settlement we are commercial, practical and above all motivated to protect you without undue costs.

Employment law is ever-evolving our job is to stay on top of the regulations, keep our clients abreast of the changes by adapting their documents and our advice as such we are not just reacted to your instructions but proactive in updating you throughout.

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We can usually offer a free consultation to businesses before you commit to any particular type of legal action or commercial project. All your business requirements can be handled under one roof by our team. Simply call our client management department for a free consultation or no-obligation quotation for our services.