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Employment Law Advice

Employment Law Advice

Settlement Agreements

On 29 July 2013 a major change to the way in which disputes in the workplace are dealt with was introduced. Compromise agreements have been replaced with settlement agreements.

In recent years, it has become more common for employees to be asked to sign an agreement limiting their right to bring any claim against their employer when either a dispute is being settled or a redundancy payment is being made.

These agreements involve the staff member signing away their rights to take any action against the employer in the Employment Tribunal in return for certain considerations – such as a payment or other incentives. The employer is also bound not to take any future employment-related action against the employee. Confidentiality clauses are often included preventing either side from revealing the terms of the agreement or, in some cases, from revealing that an agreement was reached.

How we can help

At Else Solicitors we have vast experience of negotiating and advising on agreements for employees in a wide range of circumstances. We regularly advise employees in relation to the term and the effect of entering into a settlement agreement.  An employee always has to take independent, qualified legal advice in order to make the agreement valid. The employer usually pays for this legal advice, or makes a substantial contribution towards its cost.

We also have experience of high-value and more complex exit agreements for senior staff, which may involve share options and other structured elements.

If negotiated properly, a settlement agreement can be a very effective way of an employee receiving adequate compensation when their employment ends. For the employer it removes the risk of having to handle a possible costly and time-consuming claim in the future, which could also bring damaging publicity to the company.

We can advise you about the terms and effect of any settlement agreement you have been offered, help you negotiate the best compensation package possible in the circumstances, and make sure the terms give you the protection you require.

If you would like to discuss this in more detail, please contact Stephen Stewart on 01283 526200 or email Stephen.Stewart@elselaw.co.uk.  Stephen will be happy to answer any questions you may have in relation to settlements and compromise agreements.

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