Settlement Agreements

Settlement Agreements are contracts between an employer and employee which facilitate the termination of the contract of employment.

What is the purpose of a Settlement Agreement?

Essentially the purpose of a Settlement Agreement is to prevent an employee from bringing a claim at the Employment Tribunal.

It is important to provide an employee who is leaving employment with a comprehensive Settlement Agreement which is tailored to their specific situation. “Off the peg” Agreements may subsequently be found to be unenforceable. You may wish to include post termination restrictions (restrictive covenants) which, unless properly drafted, are often invalid.

Providing an employee with a Settlement Agreement can save costs and avoid lengthy litigation. It is important to obtain legal advice if you are planning to make staff redundancies and/ or there is a dispute with an employee which may lead to their dismissal or resignation.