An agreement is a sensible way of resolving a dispute but any attempt to do this without following the rules on settlement agreements won’t work and the arrangement will be unenforceable. A good reason why you should seek legal advice early.
Settlement agreements are normally used:
to end a disagreement between an employer and an employee at the end of employment or
to reach a negotiated compromise about how and on what basis an employee will leave.
Settlement agreements are becoming increasingly common in cases of redundancy. They are also used in many kinds of cases where employment law issues arise such as unfair dismissal or discrimination claims.
The purpose of a settlement agreement is to record the terms of employment will end or a dispute will be resolved. Those terms are usually that the employer will pay a sum of money in return for the employee giving up rights to make the employment-related claims set out in the agreement.
In summary, the rules on settlement agreements are:
The settlement agreement must be in writing
The settlement agreement must contain certain information stipulated by law
An employee must receive advice on the meaning and effect of the settlement agreement by someone qualified to do so such as Spencer Shaw Solicitors
The advice must include the effect of the settlement agreement on an employee’s ability to make a claim to an employment tribunal.
An employer almost always makes a contribution to the legal costs of advice on the meaning and effect of the agreement.
With most settlement agreements, the employer’s contribution to costs is often enough to cover the cost of the work we do for an employee. As an employee, there may not be a charge to you for our work.