What is an employment settlement agreement?

A settlement agreement is a legally binding agreement between an employer and an employee, where the employee accepts a sum of money in full and final settlement of any Tribunal or Court claims against the employer, arising out of their employment or its termination. It is one of the only ways in which an employer can ensure that an employee will not bring a claim to the Tribunal after their employment comes to an end.

There are various requirements that must be met in order for a compromise agreement to be legally binding. The agreement must be in writing, it must identify the employee's legal adviser (who must have a policy of professional indemnity insurance in place) and it must list the specific claims that the employee may have against the employer.

The employee must obtain independent legal advice in relation to the terms and effect of the compromise agreement in order for it to be legally binding. Their employer will normally make a contribution to legal fees in this regard.

Call the Employment Solicitors at Forbes today on freephone 0800 975 2463 or contact us by email.

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26 Jan 2018

Employment & HR

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