Settlement agreement pack

A Settlement Agreement is a legally binding contract made between an employee and employee. It is usually entered into at the termination of employment and sets out the full terms between the parties.

Settlement agreements can also be used to resolve an ongoing workplace dispute, for example, a dispute over holiday pay. These agreements can be proposed by either an employer or an employee, although it will normally be the employer.

Once a valid settlement agreement has been signed, the employee will be unable to make an employment tribunal claim about any type of claim which is listed on the agreement.

Where the employer and employee are unable to reach an agreement, the settlement discussions cannot usually be referred to as evidence in any subsequent unfair dismissal claim. Where the settlement discussions are held to resolve an existing dispute between the parties they cannot be used as evidence in any type of claim.

• Settlement agreements can be used to settle a wide range of employment-related disputes, including claims for unfair dismissal, discrimination, breach of contract, and more.

• For a settlement agreement to be legally binding, it must meet certain requirements, such as being in writing and signed by both parties, and the employee must have received independent legal advice on the terms and effect of the agreement.

• In exchange for the employee agreeing to settle any potential claims, the employer will typically offer a financial settlement, which may include a sum of money, a reference, and other benefits.

• Settlement agreements are voluntary, and the employee has the right to reject the proposed terms if they are not satisfactory. However, if the employee rejects the agreement, they may lose the opportunity to receive the financial settlement offered.

• Settlement agreements can be a useful tool for employers to manage and resolve disputes with employees, as they can help to avoid the time, expense, and uncertainty of litigation.

• However, settlement agreements are not always appropriate or effective, and employers should carefully consider the specific circumstances of each case before proposing a settlement agreement.

• Employers must ensure that settlement agreements comply with relevant employment law and do not attempt to waive an employee's statutory rights, such as the right to bring a claim for discrimination.

• If a settlement agreement is reached, it will typically include a confidentiality clause, which prohibits both parties from discussing the details of the agreement with third parties.