Settlement Agreements

A Settlement or Compromise Agreement, (‘the agreement’) is a formal document that supports and records the mutual termination of a contract of employment, that has the potential to turn into a legal dispute.  The agreement sees the employer compensating the employee for relinquishing their employment rights in settlement of their potential claim(s) against the employer, (save for limited exceptions). The agreements are often drafted to include clauses dealing with confidentiality elements also.

Entering into the agreement is a legally binding way to bring the employment relationship to an amicable end.  Some important points to note are:

  • the employee must receive independent legal advice on the terms of the agreement before it is binding on the parties.
  • it is commonplace for the employer to pay or make a significant contribution towards the employee’s legal fees, in taking legal advice on the agreement.

The advantage of a negotiated agreement is that the parties ultimately reach a mutual arrangement. Without this, an Employment Tribunal would be needed whereby the decision of the court would determine the outcome. Not only could this be severely disadvantageous to the parties, the litigation itself is likely to be stressful whilst incurring considerable legal costs.

Griffin Law is on hand to help either employees who seek independent legal advice on the intricacies of the settlement agreement, or employers who may have a potential dispute with an employee and/or who wish to discuss how Settlement Agreements might be used within their business.

Contact us today on 01732 525923 or at