A settlement agreement is a legally binding contract between an employer and employee that is used to resolve workplace disputes. Generally, settlement agreements are offered by employers who seek to protect themselves from claims for unfair dismissal, discrimination, or breach of contract. By signing a settlement agreement, an employee waives right to pursue claims against their employer in a Tribunal or Court.
Settlement agreements can also work in the interests of employees. They allow for a clean break, avoid the need for lengthy and costly legal battles, and often provide a lump sum payment. For a settlement agreement to be legally binding the employee must consult an independent legal adviser (either a solicitor or a certified trade union representative).
However, you should also consider seeking legal advice early in the process. A solicitor will help you understand whether a settlement agreement is in your interests and can help you to negotiate favourable terms.
If you choose to seek legal advice your employer will generally pay a contribution towards this (sometimes up to 50% of the cost).
If you are considering entering into a settlement agreement with your current or past employer, it is important to weigh up all the options available to you.
The employment law team at McAllister Olivarius has helped hundreds of employees to negotiate their settlement agreements. We will be able to help you understand in clear terms what is being offered.