A settlement agreement is a legally binding contract between an employer and employee which details an employee's claims against the employer. It also contains terms including when the employment will be terminated, how much compensation is offered, how the employee will serve their notice period and more.
Negotiate with an employee from the outset and protect yourself from any future claims using this settlement agreement (previously known as a compromise agreement). A settlement agreement is a legally binding contract which waives an employee's right to bring a claim, normally in exchange for payment.
Settlement agreements can be used in many circumstances including handling grievances, long term sickness, redundancy and performance management at work. Use this legally binding settlement agreement to prevent taking a dispute to the Employment Tribunal which could be costly and have uncertain results. Severance arrangements must be recorded in writing and the employee must receive independent legal advice for the agreement to be legally binding.