Employment » Settlement Agreements
Settlement Agreements (or Compromise Agreements as they were previously known) are a recognised way of bringing about the end of the employment relationship.
A Settlement Agreement is a document agreed between the employer and employee either after an amicable discussion or following a dispute which sets out the terms upon which the employment is to end. Usually there will be a tax free payment from the employer as an incentive to enter into such an agreement. In return the employee waives their right to bring a claim against the employer for events that occurred during the employment relationship.
In order for the Agreement to be valid and legally binding you must obtain legal advice from a qualified independent adviser.
The terms of a Settlement Agreement usually include:
- Confidentiality clauses (the parties are not to discuss the terms of the Settlement Agreement)
- Non-derogatory comments (the parties are not to say or write anything which could damage the reputation of the other)
- An agreed reference (the employee can negotiate the reference that the employer will give to future employers)
- That the employer will make a contribution towards the employees legal fees in getting the necessary advice on the terms of the Settlement Agreement
As part of the terms of the Settlement Agreement, the employer will usually pay the employee’s legal fees for obtaining legal advice. As such, it should not cost you to receive the necessary advice.
Howells have years of experience of advising on the terms of Settlement Agreements across all industries. If you have been offered a Settlement Agreement contact us on 0114 404 06 06 to arrange an appointment with a member of our Employment team who can explain the process to you and provide advice on the terms of your Settlement Agreement and any alternative remedies that may be available to you.
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