Settlement Agreements are often used when employment relationships are coming to an end by agreement. Settlement Agreements represent the only route whereby an employer can pay compensation to an employee and guarantee that the employee will not take the money and still bring a claim. Employees are usually paid a sum in addition to their strict legal entitlement as an incentive to sign away their rights to bring a claim. There can be issues for employers in broaching the subject of a possible leaving deal. The government introduced “protected conversations” which are designed to enable employers to have an off the record or without prejudice conversation with employees to talk through possible leaving options. However, the rules applied to these are not straight forward and don’t apply to all situations.
We offer advice to employers about how to approach the subject of a potential Settlement Agreement and are often engaged to draft the agreement itself.
We are frequently instructed by employees to advise them upon the terms of draft Settlement Agreements and, in particular, whether the deal on offer is something it would be reasonable for them to accept.