How can Rocket Lawyer help?
Settlement agreements are legally binding contracts between an employer and an employee. They’re used to resolve statutory employment disputes (ie legal claims that employees want to make against their employer for infringing their employment rights).
Creating an effective settlement agreement prevents the matter from being litigated, usually because the employee agrees to accept compensation in exchange for not taking the case to court. This often reduces the costs and hassle for both parties.
A settlement agreement details an employee's claims against their employer. It sets out the terms they’ve agreed on to settle their dispute, for example:
if and when the employment will end, and any terms under which the employee will leave their position
how much compensation the employer is offering
how the employee will serve their notice period
For more information, read Settlement agreements with employees.
An employee must always receive independent advice for a settlement agreement to be legally binding.
Before signing a settlement agreement, an employee should get independent advice from a lawyer or other qualifying adviser.
If you’re an employee, you may also choose to get advice before negotiating your settlement agreement if you’re unsure what you should be asking your employer to agree to.
If you’re an employer, you may want to organise independent advice for an employee, to ensure that they are bound by your settlement agreement.
You can use Rocket Lawyer’s template to create your Settlement agreement.
Once a draft settlement agreement has been created, the advisor will ensure that the employee understands the terms of the agreement and the effect that they will have. In particular, the advisor can:
ensure the employee understands the implications of their commitment not to take their case to court
advise on whether they have a potential claim for, for example, unfair or wrongful dismissal
suggest whether, based on the value and likelihood of success of a potential claim, the employee should accept the terms of the agreement or should ask for more compensation
explain how the employee may negotiate different terms.
An advisor can then sign the certificate (ie section) within the settlement agreement that acknowledges that they have given the employee legal advice.
Once an employee has received independent advice, they and their employer can sign the settlement agreement with confidence.
Rocket Lawyer has a panel of expert lawyers available who can provide employees with specific, independent advice tailored to their situation.
If you’re the employee, submit your details, and the Rocket Lawyer team will be in touch to discuss your options.
If you decide to proceed with the service, a lawyer will review your settlement agreement. They will then schedule a 15 minute call with you to discuss the agreement and its implications with you.
After receiving advice, if you still want to proceed with the settlement agreement, your lawyer can sign the agreement to confirm that they have given you advice.