In the current economic climate, many businesses are understandably looking more closely at staff performance and effectiveness to ensure their business is operating effectively.
Where a decision is made to end the employment of a member of the team, in order to ensure a clean break and to minimise future claims for unfair dismissal, a Settlement Agreement is a useful tool to protect you and your business.
What is a Settlement Agreement?
A Settlement Agreement is a legal contract between your business and your employee/s which sets out the terms of your termination.
Your employee signs away their right to bring an employment tribunal claim in exchange for an agreed payment from your business.
You can also agree other things, such as the content of any future job reference.
Your employee will usually be given a minimum of 10 days to consider the terms of a Settlement Agreement which is only valid if:
- It is in writing
- It relates to a particular complaint or proceedings
- Your employer receives advice from a relevant independent adviser such as a solicitor who is identified in the agreement and signs it
- The adviser has professional indemnity insurance; and
- it states that the regulations specific to Settlement Agreements have been met
In what circumstances can a Settlement Agreement be useful?
Although many Settlement Agreements are implemented to allow a clean break, for example where an employee or employees are not performing well, an Agreement can also be used to bring to an end a dispute over working conditions, for example holiday pay or a wages dispute.
A Settlement Agreement is also helpful in bringing employment to a swift end without the need to go through a protracted disciplinary process.
Who pays for a Settlement Agreement?
It is usual for the employer to cover all fees relating to Settlement Agreements and to offer employees access to legal advice without the individual incurring any costs.
How can Palmers help?
Palmers’ highly experienced employment law team can support your business by offering the required legal advice to your employees. It is important to remember that unless your employee has been provided with access to independent expert legal advice, any Settlement Agreement they are asked to sign would be invalid.
We are also able to draw up the terms of a legally binding formal written Settlement Agreement.
Group Settlement Agreements
Our service extends to offering Group Settlement Agreements in instances where matters involve several employees and we are able to visit your premises for the convenience of the individuals concerned and to minimise business disruption.
To find out more about Settlement Agreements or to discuss your requirements informally and in confidence, please get in touch with us today.
Settlement Agreements
