Employment Law: Settlement Agreements
What is a Settlement Agreement?
A settlement agreement is a legally binding document. It terminates your contract of employment at a given date and sets out the agreement reached between the parties.
Once you have signed it, you are then prohibited from bringing any legal action either in the Courts, or the Employment Tribunal for matters arising from your employment or its termination.
Do I need a Solicitor?
Yes. When you sign the settlement agreement document you are waiving your entitlements pursuant to Employment Law. A solicitor should be present to protect Employees, who may have very little understanding of their rights from signing agreements which are not in their best interests.
A Settlement Agreement is not legally binding until an employee has received independent advice as to the nature and effect of the agreement.
Do I have to sign it?
No. You don’t have to sign the agreement. You can either try to negotiate a higher settlement directly with your Employers; or you can instruct a Solicitor to negotiate on your behalf.
Alternatively, you could lodge a claim with the Employment Tribunal, providing that you do so within the prescribed time limits.
If a Settlement Agreement is being offered to you as an alternative to a performance management plan, then you could choose not to sign the agreement and remain in your role being performance managed. However, there is always a risk that if your performance does not improve, your employment may then be terminated without any payments being made to you.
How much will I have to pay?
Your Employer is obliged to contribute to the costs that you will incur instructing a Solicitor to advise you as to the nature and effect of the agreement. The amount offered varies between employers but usually it is sufficient to cover our costs. But this does not include us negotiating a higher settlement figure on your behalf.
If you need any further help and advice relating to this subject please do get in touch. You can do so either via telephone on 01332 364436 or via email at r.delluongo@timms-law.com.