What is a Settlement Agreement?
A Settlement Agreement (previously known as a “Compromise Agreement”) is a legally binding agreement following the termination of your employment.
Settlement agreements are often given to employees when they are being made redundant. However, they can also be offered to employees if an employer thinks they are performing badly in their job or are guilty of misconduct. In some cases, an employee will be aware that their boss is unhappy, while for others, being offered a settlement agreement can come as a shock.
Essentially, an employee is given money or severance pay in return for not bringing a claim against their employer. Each settlement agreement will vary but usually the documents will include clauses that deal with: the claims to be settled; the payments you will receive and the relevant tax issues; a confidentially/gagging clause (so you can’t bad mouth your employer) and any agreed reference from your employer. Once signed by both the employer and the employee and certified by an independent solicitor, a settlement agreement becomes legally binding.
How we can help
When you’re pulled into a meeting and asked to leave your job, it can be a shock. Later on, it can be hard to recall exactly what was said. The best advice is therefore to make a note about what happened and what was said as soon as possible. The next thing to do is get some decent advice. An employer will usually pay the legal costs for you to see a solicitor or qualified adviser independent of the employer as it is a legal requirement for the settlement agreement to be contractually binding on the employee.
An employment solicitor can help you consider whether you’re getting a good deal and whether you have any grounds for a claim against your employer – such as discrimination or unfair dismissal. If you’re facing a period of unemployment, you need to be able to meet your household living expenses until you get another job. One of the considerations you need to make is whether the money that is being offered is enough.
You need to consider why you are being offered the agreement and what rights you are being asked to waive as a result of you signing. Armed with this knowledge, you can often save legal costs by negotiating yourself directly with your employer and in our experience, you often end up with a better deal, which may include a bigger payment.
The employer will often insist that the settlement agreement be signed by a particular date, but you are not legally obliged to sign a settlement agreement and if you don’t sign the agreement, then your full employment rights are reserved for you to make a claim against your employer.
To see some typical terms of a settlement agreement and our advice on them, please click here.
Get in touch
For further information contact Justin Sadler or Paul Wild by telephone 0118 958 9711 or send an email to: justin@barrettandco.co.uk If this relates to settlement agreements send your email to: paul@barrettandco.co.uk
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1/22/2020 - Very professional and extremely thoughtful. We choose to complete our Wills through Barrett and Co twice, and both times they have made it a simple and efficient service. We would highly recommend.
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1/02/2020 - Upon needing some much needed employment related legal advice I was very lucky to come across Barrett and Co. The whole process was fluid, simple, yet professional right through from my initial enquiry to leaving the office happy and eased of mind. I would highly recommend Barrett and Co to anyone that requires legal advice of any nature; my particular case, whilst not overly complicated, regardless left me wanting reassurance and security. A quick call, appointment booking, and a 1 hour meeting with Justin later provided me with both.
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12/23/2019 - I found Barrett & Co via a search on Will Aid 2019 and was lucky enough to get an appointment with Vanessa Ruparel, one of the Solicitors. The whole process of getting our wills done was very smooth and professional. Service was of high quality and very friendly. I would certainly recommend Barrett & Co. Many thanks Vannessa 🙂
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12/01/2019 - I have used Barrett & Co on several occasions and had excellent service from them. Richard Ince and his team have just completed the purchase of a house for myself, they were always on top of any issues and concerns from myself and the seller's solicitors and brought to my attention any points that they had concerns about. They could always be contacted and sent regular updates. I would definitely use them again
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11/27/2019 - Thank you to Chris Miller sorting out the payment issue with advertising company but decision not gone my way in the Court. Chris done everything he can and I will be using this firm for my future assistance if needed. Thank you again Chris.
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11/27/2019
