A settlement agreement is a document that sets out an employee’s agreement not to pursue a claim against the employer.

It used to be called a Compromise Agreement. As an employer you would offer a settlement agreement to an employee where you suspect that a claim may come, or where you just want to ensure one does not.

Basically, the employee signs away the right to pursue any employment-related claim against the employer.

There are many conditions of a settlement agreement, the main ones are that:

  • The employee must receive independent legal advice.
  • The agreement must be in writing.
  • The agreement must relate to a specific claim that the employee could bring against the employer.

We can draft a settlement agreement to fit the circumstances of the case in question and can advise you how to proceed in offering it to the employee.

Call us now on 01524 735525 or Contact us to get started with your free consultation.

When would we use a settlement agreement?

Typically, you would introduce a settlement agreement in the following circumstances:

  • Performance management issues
  • Redundancy
  • Long term sickness
  • To deal with a grievance
  • Upon the transfer of a business

By using a settlement agreement, you can be sure that the employee will not bring a claim in the employment tribunal.