Employer-employee relationships can go sour at anytime and when it proves impossible to resolve problems through talking or formal procedures then this is where a settlement agreement can help.

A settlement agreement is a legally binding contract between the employer-employee whereby the employee waives any right to bring any financial claim against the employer usually in return for a financial payment. It can also set out the terms on which the employment terminates, however, they can also be used to settle disputes mid-contract or at any time without the need for terminating employment.

How can it help you or your company?

• Quicker and cheaper alternative of going to an Employment Tribunal.
• Versatility – either party can propose a settlement agreement be explored
• Terms are usually reached via the process of negotiation.
• The employer will contribute up to £500.00 plus VAT towards employees’ legal costs
• An employee must receive Independent Legal Advice on the settlement agreement.

When to use?

• Goodwill Gesture
• Instead of going through a disciplinary, performance or redundancy process
• Removing a difficult employee
• Offering enhanced redundancy to those taking voluntary redundancy
• Resolve previous claims
• Other issues that arise

For further information about settlement agreements, please contact Bradley Smith at bradley@kjcoxsolicitors.co.uk