If you are an employer seeking to protect your business from potential claims on the termination of an employee’s employment, a settlement agreement may be required.

A settlement agreement is a legally binding contract prohibiting an employee from bringing legal action against their employer in respect of the employee’s employment and/or its termination. It provides reassurance and certainty for the employer by negating any risk of a claim by the departing employee.

In return for the employee agreeing not to pursue any claim, the employer will provide an employee with compensation or a severance package.

Settlement agreements are often used where there has been a breakdown in the employer, employee relationship or in redundancy situations.

At LawforEmployers, we can ensure that your business is protected from potential claims by offering the advice you need on settlement agreements.

Resolving potential claims

It is important to note that settlement agreements should only be used when there are potential claims to be resolved.

It is essential that settlement agreements are executed properly. A settlement agreement which is not executed properly may not rule out the risk of an ex-employee bringing a claim at a later date.

For this reason, it is vital to seek legal advice when entering a settlement agreement with an employee.

In order to be executed properly, a settlement agreement must:

  • Be in writing
  • Relate to a complaint or legal proceedings
  • State the statutory conditions for a severance agreement have been satisfied
  • Provide details of the independent legal advisor
  • Confirm the employee has received advice from the legal advisor on the terms and the effect of the agreement

Saving you time and money

When considering offering an employee a settlement agreement, consulting with an expert employment solicitor is essential.

At LawforEmployers, we understand that each settlement agreement may have different requirements. Our expert employment law team can ensure that a settlement agreement is the best course of action and that it is executed properly.

A properly executed settlement agreement can save your business time and money by protecting you from any potential legal proceedings.

Contact LawforEmployers for expert settlement agreement advice

To speak directly to an expert employment law solicitor, contact LawforEmployers today.

We are available to ensure that any settlement agreements are both properly executed and legally binding. This will protect you from any potential claims, saving you both time and money.

For more information on how we can help you, call us on 01282 695 400, or simply complete our quick contact form and we will be in touch as soon as possible.