Guide to settlement agreements for employees

Settlement Agreements – advice for employees

Employment relationships do not always run smoothly. In some cases, they may break down to such an extent that it may be necessary for the working relationship to be brought to an end.

One way of facilitating the end of the relationship is through the use of settlement agreements.

These are legally binding agreements, entered into voluntarily and agreed through negotiation, which set out the financial and other terms on which an employer and employee will go their separate ways.

Usually, they include a severance payment made by the employer in return for you, the employee, agreeing not to bring certain legal claims.

The Government has also introduced a mechanism whereby employers can initiate ‘pre-termination negotiations’ to discuss an amicable parting of the ways. In that context, offers of settlement cannot be presented as evidence in unfair dismissal cases provided there has been no improper behaviour during discussions about the agreement.

Seeking legal advice is essential if your employer invites you to end your working relationship in this way.

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