Signing a settlement agreement essentially means you waive or settle all possible claims against your employer, usually in return for a payment. The agreement will include details of any payments to be made, the claims that are being waived, and often a confidentiality clause. The agreement is also likely to include a contribution by your employer towards the cost of your legal fees.
Terms that are negotiated through a settlement agreement can often represent a better financial outcome compared to what you may achieve through issuing a case in the employment tribunal. This is partially due to the uncertainty and ‘litigation risk’ of issuing a claim at the tribunal. An agreement can also provide you with control over specific terms, such as a reference or an agreed announcement. These are terms that can be extremely valuable to an employee.
In addition, by entering into a settlement agreement, you can avoid the financial and emotional burden of proceeding to issue a claim at an employment tribunal.
Settlement agreements are completely voluntary and both you and your employer need to agree to the terms. You must carefully read your agreement, and it can only become legally binding once you have taken independent legal advice on the terms of the proposed agreement and the effect it has on your ability to pursue any claims.
Generally speaking, settlement agreements can be concluded relatively quickly. If you are happy with the terms of the proposed agreement, we should be able to finalise the agreement within a few days. In some cases, it can be concluded on the same day. However if there are further negotiations needed on the financial package or terms of the agreement then this means that the process will take longer.
We can help you understand any potential legal claims you may have against your employer and the merits of those claims. For example, this may involve considering if you could have an unfair dismissal claim or any discrimination claim. We can then advise you on the amount of compensation you could expect to receive if you brought such a claim in the employment tribunal. This will help you to establish whether you are being offered a fair settlement package or if you would like to negotiate an increase in your compensation.
Finance Sector – Settlement Agreement
A Guide To Settlement Agreements
Employment Solicitor Sarah Hayes takes us through a guide to settlement agreements. Why are they beneficial? What should you need to know and what are the practical steps that need to be taken for them to be legally binding?
00:28 What is a settlement agreement? Sarah defines what it means
00:48 What is the purpose of a settlement agreement and what will include
01:15 There are various benefits of having a settlement agreement – Sarah talks through what these are
02:00 How long does it take to agree the terms of a settlement agreement?
02:40 It is important to see a solicitor if you are issued with a settlement agreement – Sarah talks about how this works in practice
04:06 What happens if you want to negotiate the terms of your agreement and do you have to sign the agreement? Sarah explains in detail and what the implications are for you.
04:45 How do you know if you’re getting a fair deal?
05:30 What is the typical time frame for payments being made?
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