Settlement Agreements

If you have an employee or ex-employee seeking to raise a grievance, requiring disciplinary action, having performance issues or threatening to bring an employment tribunal claim, then one way to avoid a protracted dispute and resolve it quickly and efficiently is by use of a settlement agreement (formerly known as a compromise agreement).

A settlement agreement is a legally binding mechanism that employers can use to seek to settle any dispute on a full and final settlement basis usually in return for the employee agreeing to terminate their employment with a lump sum of money. Sometimes employees will seek to include other terms, such as the provision of a reference.

However, settlement agreements are not legally binding unless they satisfy various statutory requirements and also the employee will need to have received independent legal advice on the terms and effect of the settlement agreement before entering into it.

We have the expertise to deal with settlement agreements effectively and efficiently. We have drafted many settlement agreements on behalf of employers to bring matters to a speedy resolution. We can also assist in the swift negotiation of terms if necessary and advise you on the likely prospects of a settlement agreement being accepted.

There are many advantages to resolving disputes under a settlement agreement including speed, certainty, reduced reputational damage, confidentiality and the maintenance of restrictive covenants.

Please contact us should you wish to discuss how a settlement agreement could assist your business.

If you are a business that already has legal representation but you have an employee needing independent legal advice on a settlement agreement, then please refer them to our website and the section, Employees – settlement agreements.