Settlement Agreement – Employer
In our experience, settlement agreements are used widely by employers. They allow an employer and employee to terminate employment in a civilised fashion with the employer knowing they cannot be sued and the employee receiving appropriate compensation. A settlement agreement is only binding if the employee has been advised by an independent adviser, normally a solicitor. We provide settlement agreement advice to employers. We draft settlement agreements for employers and also advise employees on the terms and effect of entering into a settlement agreement. This means that we have built up experience of advising from both sides of the table and can help you in advising the important points that should always be dealt with in a settlement agreement.
As an employer, the most difficult part of planning any severance is often how to approach an employee in the first place. As an HR Manager you need to always be aware that for communications to be protected by ‘without prejudice’ protection, you need to have a ‘dispute’ in the first place. The only exception to this rule is if you make an approach under S111A of the Employment Rights Act which has a number of limitations.
We can advise you on the best way to make the offer to the employee in a way that legally protects you, as an employer. If you ask us to draft a settlement agreement, we will send you a settlement agreement questionnaire to gather important information which includes:
- What is the correct name and legal status of the employer?
- A requirement for you to provide us with the employee’s contract of employment.
- How much you are agreeing to pay and how will the payment will be broken down?
- Whether you believe the employee will try to compete with you.
- How much do you agree to contribute towards the employee’s legal fees.