November 17 2023
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A settlement agreement – previously known as a compromise agreement – is a legally binding contract made between an employer and employee; either towards the end or just after employment has ended.
It sets out the terms of leaving and, once signed, means you cannot later bring legal action against you employer regarding any work related matters or the termination of your job. This is usually in exchange for a ‘termination payment’ and other benefits which are set out in the agreement.
The main benefit of entering into a settlement agreement is to provide a clean, amicable break with your employer.
Most settlement agreements include a tax efficient payment, together with a job reference and clauses ensuring that your employer does not make any unfavourable comments about you. In return, your employer will be able to safeguard against you making any future legal claim against the company.
If you are being asked to consider a settlement agreement it is vital that you seek independent legal advice before signing any documents.
At Mander Hadley, our friendly and knowledgeable team of employment law experts can guide you through the process and ensure that the settlement agreement is fair.
Once signed, there is no going back – a settlement agreement is legally binding. If it’s not in the agreement you won’t get it.
Contact us now to find out how we can help you with advice on settlement agreements. You are in safe hands at Mander Hadley.