Settlement Agreements
Settlement Agreements
Settlement agreements are also known as Compromise Agreements, Severance Agreements and Redundancy Agreements, and are legally binding contracts between parties involved in a dispute, or legal matter, or to end employment.
It typically includes provisions such as financial compensation, confidentiality clauses, non-disclosure agreements, and any other specific actions or obligations to be undertaken by the parties involved.
Why are Settlement Agreements Used?
Settlement agreements are used to bring closure to disputes outside of formal court proceedings.
They offer a more efficient and cost-effective way to resolve conflicts, saving both time and money compared to lengthy litigation processes.
Settlement agreements provide flexibility and control to the parties involved, allowing them to tailor a resolution that meets their needs and interests.
When ending employment through a settlement agreement, the essential elements that should be included to ensure clarity and legal validity are outlined below:
Termination Details:
Clearly state the effective date of the termination of employment and the reasons for the termination.
Confidentiality and Non-Disclosure:
Include provisions requiring both parties to maintain confidentiality regarding the terms of the agreement and any related discussions or negotiations.
Return of Company Property:
- Outline the employee’s obligation to return any company property, including but not limited to keys, access cards, electronic devices, documents, and confidential information.
- Specify the timeframe and method for returning company property.
Financial Considerations:
- Outline any financial compensation or benefits to be provided to the employee as part of the agreement.
- Specify the amount of any severance pay, accrued vacation or leave days, bonuses, or other entitlements.
- Include details regarding the method and timing of payment.
Release of Claims:
- A clause whereby the employee agrees to release the employer from any claims, grievances, or causes of action related to the employment relationship or its termination.
- Clarify the scope of the release, ensuring it covers all potential claims known or unknown at the time of signing the agreement.
Do you need help? Book a consultation with a solicitor
What to Do If You Receive A Settlement Agreement from Your Employer:
Seek Legal Advice: Get independent legal advice before signing a settlement agreement. Our employment solicitors will review the settlement agreement and advise you on your rights and options.
Understand the Terms: Take the time to carefully review the terms of the settlement agreement, including any financial compensation, confidentiality clauses, and other obligations.
Negotiate if Necessary: If you’re not satisfied with the initial terms proposed by your employer, you may have the opportunity to negotiate for better terms or seek amendments to the agreement.
Consider the Consequences: Before agreeing to a settlement, consider the potential implications for your future employment, career prospects, and legal rights.
Make an Informed Decision: Ultimately, the decision to accept or reject a settlement agreement should only be made after you understand your rights, interests, and the potential outcomes of the dispute.
Settlement agreements are used more widely nowadays to end employment. However, it is essential to approach them with caution, seek legal advice, and carefully consider the terms before making any decisions.
- Arrange a remote appointment within 24 hours
- Meet with a solicitor to review the settlement agreement
- Sign the agreement and we complete the process (In some cases where you ask us to contact or negotiate with your employer, this process will require more time).
Got a settlement agreement? Use our simple 3 step process:
Settlement Agreement Fees
you will pay nothing, but there will be exceptions* when you are required to top up the contribution. This will be discussed, and you will have clarity from the onset.
You Pay Nothing
If you are satisfied with the settlement/compensation figure and need legal advice on the terms of the settlement agreement.
Fixed Fees Apply
If you are not satisfied with the settlement, or you do not wish to sign the settlement agreement but require advice or other legal services.