A settlement agreement is often referred to as a ‘severance/redundancy agreement’ or until recently a ‘compromise agreement’. A settlement agreement is a way for employers and employees to achieve a ‘clean break’ when terminating a contract of employment or resolving a dispute. It sets out what you will receive from your employer – like a severance payment – and what you can or cannot do in return.
You must take independent legal advice for a settlement agreement to be valid, but the employer will normally pay for this.
D&N will advise the employee on any potential claims so that the employee fully understands the legal issues and the value of any potential claims.
The advantage to the employer of getting a settlement agreement is that the employer can be sure the employee will accept the settlement and not seek further compensation.
The advantage of a settlement agreement to the employee is that they are fully advised before settling and are awarded a guaranteed amount of compensation.
What are the benefits of a settlement agreement?
- A settlement agreement provides certainty for both yourself and your employer. You know exactly how much compensation you will receive and when, while your employer is reassured that no legal claims will be brought against them.
- A settlement agreement guarantees that you receive a set amount of money as compensation for losing your job. In contrast, if you wanted to bring an employment law claim against your employer, there is no guarantee you would be successful.
- Bringing a claim in an employment tribunal is also a lengthy and stressful process, whereas a settlement agreement is a relatively speedy, straightforward legal process, which minimises the risks and uncertainty.
Why do I need a solicitor?
You need to obtain advice from a relevant independent advisor, usually a solicitor who will advise you on the terms and effects of the agreement.
Who will pay for this?
The cost of advice under a settlement agreement will in the majority of cases be covered by your employer, meaning that you may not have to pay anything for this advice personally.
At D&N you will be advised by an experienced, qualified solicitor who will provide solid, straightforward legal advice on your settlement agreement, based on your specific circumstances.
Contact us today to talk confidentially about your settlement agreement issue with one of our specialist settlement agreement solicitors.
Call us: 01902 504411