Settlement Agreement: what you need to know

Settlement Agreement: what you need to know

Have you been offered a Settlement Agreement? This document, previously known as a Compromise Agreement, is a legally binding agreement used to resolve disputes between an employer and an employee.

It can be drawn either during or following the end of an employee’s employment, often to prevent them from taking legal action and pursue a claim against the employer.

Should you accept your employer’s offer?

While you are not obliged to do so, you could benefit from a Settlement Agreement in a number of ways.

First of all, it can help secure financial compensation and avoiding the risk of losing an unfair dismissal claim at the Employment Tribunal.

Furthermore, a Settlement Agreement often comes with a negotiable enhanced redundancy package, usually featuring a higher payment than the statutory minimum.

Your employer could also agree to include a favourable reference in your agreement, which can come in handy for future job applications.

However, due to their legally binding nature, accepting a Settlement Agreement will prevent you from bringing any claims against your employer (e.g. unfair/wrongful dismissal claims).

We strongly recommend getting in touch with a specialist employment solicitor, who will be able to assess your circumstances and guarantee fair terms of the agreement.

Our Manchester-based team of experts at MWG Solicitors can explain the full implications of a Settlement Agreement and ensure you receive the correct compensation upon signing.

It’s worth noting that should you choose us to help you finalise your Settlement Agreement, it will be your employer’s responsibility to pay any legal fees.

Call us on 0161 835 2446 or send an email to [email protected] to schedule a free consultation.

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