The best outcome to an Employment Dispute is for an Employee to resolve their differences amicably but if that does not happen, and if a mutual decision is a parting of the ways, then a Settlement Agreement is likely to be the answer.

Governed by Section 111a of the Employment Rights Act 1996, a Settlement Agreement is a legally binding Agreement between the Employer and Employee which provides the Employee with compensation in exchange for the Employee waiving their rights to make a claim to the Employment Tribunal or to a Court.

It is important to ensure that the Settlement Agreement complies with the relevant legislation and we can prepare the document for you.

By law, Settlement Agreements must satisfy certain criteria.  For Example:

  • the Agreement must be in writing
  • it must relate to a particular complaint or proceedings
  • the Employee must be advised by a relevant legal adviser, e.g. a Solicitor
  • the independent legal adviser must have Professional Indemnity Insurance against the risk of the Employee making a claim against them
  • the Agreement must identify the adviser
  • the Agreement must state that certain Statutory Conditions have been met.

The Employer will usually provide a contribution towards the Employee’s legal costs in obtaining advice in relation to the Settlement Agreement which means that in most cases there will be no costs payable by the Employee.