Employment Settlement Agreements | Individuals

There can be various reasons as to why you and your Employer may want to enter into a Settlement Agreement. It could be as a result of redundancy, long-term sickness, performance issues, or a restructuring of the company. Whatever the reason, Moore & Tibbits is here to provide advice.

What is a Settlement Agreement?

These types of agreements are mutually beneficial to the Employer and Employee, as a way of parting ways in an amicable manner. The Agreement will set out the terms upon which the parties will agree to end the employment relationship. The terms usually include, (amongst other matters), any restrictive covenants that will continue after the employment relationship has ended, a mutual confidentiality regarding why and on what terms the employee’s job has ended, it may agree the wording of any future reference to be given to a prospective employer, it will set out the payout the employee will receive upon the settlement being agreed, and confirm whether any tax will be payable on the same.

How does it work?

The Employer drafts the Settlement Agreement and sends it to the Employee for signature. The Employee must take legal advice on the Agreement before signing it, and confirmation that this has been carried out will be set out in an ‘Advisor’s Certificate’, which the Employee’s solicitor will need to sign and return along with the Employees signed Agreement. The Employer will confirm within the Agreement, how much they are willing to contribute towards the employee’s legal fees.

The Agreement is a Without Prejudice and Subject to Contract document before it is signed. This means that should the employee decide not to sign the Agreement and prefers to take their Employer to court, the document cannot be produced and shown in a Tribunal hearing. However, if both parties sign the Agreement, it then becomes a legally binding document, which can be relied upon in a tribunal or court.

What if I want to make a claim against my Employer?

If an Employee is contemplating making a claim against the Employer, they should discuss this fully with their solicitor before signing the document. The purpose of a Settlement Agreement is to agree the parting of the ways, and should not be signed unless both parties are happy that they agree with the terms. If an employee signs the Agreement and then changes their mind and proceeds to issue a claim against the employer, they are highly likely to be in breach of contract of the Settlement Agreement. As such, you should not sign a Settlement Agreement unless you are entirely happy that you do not want to issue a claim against the Employer.

How quickly can Moore & Tibbits help me with my Settlement Agreement?

Here at M&T, we are available for in person meetings as well as virtual meetings and telephone. That being the case, we can provide the advice and generate the Adviser’s Certificate within days of receiving your enquiry. Once our usual procedures have taken place to open a file, and we have received your identification documents, we then arrange a time that suits you to hold our meeting. It really is that fast.

I have been sent a Settlement Agreement, what should I do?

You should pick up the phone and call our Employment Team on 01926 491181, or email us on:  employment@moore-tibbits.co.uk.