Settlement Agreements are legally binding contracts which can be used to end an employment relationship or resolve an ongoing workplace dispute.
Such agreements are entirely voluntary and can be offered at any stage of an employment relationship by either the employee or the employer. A settlement agreement will end any employment dispute or ongoing Employment Tribunal proceedings and no further action can be taken thereafter. This may be in exchange for compensation or a non-monetary settlement.
Any communications surrounding a settlement agreement should always be treated as “without prejudice” and “subject to contract”. This ensures that both parties can speak freely during these negotiations without concern that anything said will be used against them and neither party is legally bound by any agreement until a final written agreement has been signed.
An employer may approach an employee about a settlement agreement and undertake negotiations under Section 111A of the Employment Rights Act 1996. This will protect the parties during pre-termination negotiations.
If you are an employee and your employer would like you to sign a Settlement Agreement, they should usually make a significant contribution to the cost of you obtaining legal advice. It is a legal requirement that you are fully advised on the terms and effect of a Settlement Agreement otherwise the Agreement will be invalid and unenforceable.
We offer reasonable fixed fees for advising and negotiating on Settlement Agreements so that the legal costs can be picked up by your employer and you do not have to incur any. This means you get free legal advice and we simply invoice your employer directly. Our legal costs are as follows:
- Advice on the terms and effect of the Agreement only - £350 plus VAT
- Negotiation of terms and compensation in addition to advice on the terms and effect of the Agreement - £425 plus VAT
In the event your employer is not prepared to meet the full cost of our fixed fee and you do not have any additional funds to do so, we may be able to work within your employer’s budget.
If you are an employer and would like advice about how to approach an employee about a Settlement Agreement or you need assistance in drafting appropriate terms of a Settlement Agreement that are tailored to meet the needs of your business, we can help.
For a free telephone consultation about your Settlement Agreement or any specific requirements, please telephone 0117 939 0350 and ask to speak to Kirsty Hunt.