Settlement Agreements

If an employee and employer can reach an agreement without going to Tribunal, this can be recorded in a ‘settlement agreement’. This is a legal document which confirms the terms of settlement agreed, in exchange for which the employee agrees to give up their legal claims against the employer.

It is usual, but not a legal requirement, for the employer to make a contribution to the employee’s legal costs as part of the agreement, as obtaining of independent legal advice from a relevant advisor is required in order for a settlement agreement to be legally binding. The advisor must also be named in the agreement itself.

We aim to agree a competitive fixed price with you for dealing with the settlement agreement, ensuring that the agreement is dealt with in a cost effective manner.

One of our employment solicitors would be extremely happy to consider the suggested terms and conditions of any proposed settlement with either the employee or employer, drafting or reviewing the agreement and providing advice as necessary. If there are amendments needed, the solicitor will contact the other side and negotiate any amendments which may be necessary.  If the wording is agreed and acceptable, then arrangements will be made for the agreement to be signed by you and the other side as appropriate, dealing with formal completion and bringing matters to an amicable end.

Not negotiated settlement yet?

Don’t despair, if you are on the cusp of an employment claim then settlement may still be an option, but how negotiations are dealt with must be approached with caution. Section 111A of the Employment Rights Act 1996 makes negotiations regarding termination of employment on agreed terms easier to broach without risk of either party being able to rely on those discussions in any subsequent claims that follow, but only in relation to pure unfair dismissal claims.

Parties must proceed with caution, as when deciding whether negotiations may be referred to in the tribunal or court (and therefore affect the outcome of any claim), the starting point is that evidence of any such negotiations is admissible. The new legislation means there are now two possible ways the confidentiality of negotiations may be protected:

  • under the without prejudice rule, where communications marked appropriately when a dispute has arisen are inadmissible as evidence and cannot be ordered to be disclosed; and
  • under section 111A of the Employment Rights Act 1996, sometimes referred to as ‘protected conversations’ in pre-termination negotiations, which only applies in potential ordinary unfair dismissal claims and can apply where no dispute needs to have arisen but the parties wish to terminate the employment on agreed terms.

To make sure you receive the protection you desire in negotiations, trust our experienced team.

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