Settlement Agreements
Experts in the human side of business
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It is important when addressing a workplace issue to have the ability and flexibility to be able to consider including in your communications with the employee the option of a Protected Conversation, which may lead to a resolution.
When looking to settle an employment dispute it is advisable to exclude, as far as possible, any claims by the employee against the employer in return for an agreed exit and settlement payment.
To achieve this effectively such a settlement should be in the form of a settlement agreement (otherwise known as a compromise agreement) and great care should be taken in drafting such an agreement. Care should be taken to maintain ‘off the record’ communications to ensure your interests are not at risk of being compromised.
For a settlement agreement to be binding it must comply with certain conditions:
- It must be in writing, identify the adviser, relate to the particular complaint and state that relevant statutory conditions are satisfied
- The employee or worker must have received advice from a relevant independent adviser as to the terms and effect of the proposed agreement and, in particular, its effect on his/her ability to pursue their rights before an employment tribunal
- There must be in force, when the adviser gives the advice, a contract of insurance, or an indemnity provided for members of a profession or professional body, covering the risk of a claim by the employee or worker in respect of loss arising in consequence of the advice
How We Can Help
Forming settlement agreements is usually the most effective way to avoid legal action being taken against the company.
Our employment experts can support you in settlement negotiations and in drafting agreements that will result in the best possible outcome for your business.
We will advise you on the structure of the agreement and any compensation payable so as to maximise any savings that can be made and to ensure the agreement best protects you, the employer.
In all cases a settlement agreement will include a provision for no admission of liability by the employer. There should also be protection against derogatory or detrimental statements and terms to preserve the need for confidentiality.
