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01432 278179

01432 278179

  • Home
  • Individuals and families
    • Relationships and children
      • Relationships
      • Divorce
      • Dissolution of Civil Partnerships and Same Sex Marriages
      • Relationship Agreements
      • Domestic Abuse
      • Financial provisions on divorce or dissolution
      • You and your children
      • Child Living Arrangements
      • Child Maintenance Responsibilities
      • Related offers
    • Employment advice for you
      • Our employment advice services
      • Employment Advice Overview
      • Employment Tribunals
      • Settlement Agreements
      • Early Conciliation
    • Resolving personal disputes
      • Our services for personal dispute resolution
      • Boundary Disputes
      • Alternative Dispute Resolution
      • Personal Debt Recovery
      • Professional Negligence
    • Criminal Defence
      • Our criminal defence services
      • Crown Court
      • Magistrates Court
      • Police Station Representation
    • Wills, Trusts and Probate
    • Legal Costs
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      • Company & Commercial
      • Company & Commercial Overview
      • Business Start-Ups
      • Commercial Contracts
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      • Corporate Services Overview
      • Business Structure
      • Transfers, acquisitions and disposals
      • Joint venture
      • Corporate Crime
    • Dispute Resolution & Debt Recovery
      • Dispute Resolution and Debt Recovery
      • Commercial Dispute Resolution
      • Commercial Litigation
      • Debt Recovery and Late Payment Demands
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      • Employment and HR Services
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    • Health and Safety
      • Health and Safety
      • Advice on Aspects of Health and Safety Law
      • Health and Safety Documentation
      • Tailor-made Policies, Procedures and Risk Assessments
      • On-site Health and Safety Management and Practical Guidance
      • Health and Safety HSE Interviews and Investigations
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    • About Kidwells
      • Learn more about Kidwells Solicitors
      • About us
      • Meet the Team
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Settlement Agreements

Not all business relationships between employers and employees work out. Ensuring that the Settlement Agreement process is implemented properly is vital. If you fail to do so you could find yourself facing the threat of an Employment Tribunal.

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Creating an amicable and professional agreement promises safety from the threat of an Employment Tribunal

Settlement Agreements, formerly known as Compromise Agreements, are legally binding agreements. They set out the terms and conditions agreed between parties (normally employer and employee) when they agree to settle a potential employment tribunal claim(s).

The Settlement Agreement confirms the finalised financial settlement terms agreed between the parties, for example, to dissolve the working relationship. The Settlement Agreement must meet all legal safeguards. Failure to do this could result in the employee walking away with the settlement money as well as lodging an employment tribunal claim.

Important things to consider:

  • Generally an employer and employee/ex-employee enter into a Settlement Agreement. However, they can also be between an employer and a worker. For example, a complaint about holiday pay.
  • We tailor every Settlement Agreement to reflect the individual circumstances of the case in question.
  • The Settlement Agreement will not be legally binding unless the employee in question has taken advice from an independent legal or qualified advisor.

What are the key features of a settlement agreement?

  • The employee (or former employee) usually receives some form of financial payment. An employee would also often receive a reference as part of the agreed terms;
  • They are entirely voluntary- they include terms and conditions that are mutually agreed, and parties do not have to enter into them if they do not wish to do so;
  • They are often reached through a process of discussion and negotiation. The parties do not have to accept the terms initially offered – there may be a process of negotiation during which both sides make offers and counter offers.

When would you use a settlement agreement?

  • To bring an employment relationship to an end in a mutually agreed way – they are often used in situations where an employer and employee feel that their employment relationship is no longer working and a clean break is the best way forward;
  • To reach an agreed and final conclusion to a workplace issue/dispute which doesn’t cause an employment relationship to end. For example, a grievance or potential discrimination claim/complaint.

What are the advantages of using a Settlement Agreement?

  • It draws a line under a difficult situation;
  • It guards against future claims as well as reducing the risk of potential adverse publicity;
  • Can provide a swift and dignified end to an employment relationship that is not working;
  • It avoids time, cost and stress involved for both parties in a Tribunal claim;
  • You can use it at any stage of an employment relationship;
  • It can help you avoid having to undergo lengthy time consuming disciplinary and/or performance improvement plans;
  • It can help you keep the circumstances leading to the termination of your employee’s contract and/or the terms and payment offered confidential;
  • Preventing the employee from making disparaging remarks;
  • Reaffirming their post-termination covenants;
  • You’ll find peace of mind knowing that they cannot pursue a claim against you in the Tribunal or Court (so long as you have not misrepresented the reason for termination).

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    We are authorised and regulated by the Solicitors' Regulation Authority, SRA No. 535081

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