Settlement Agreements

A settlement agreement (formerly known as a compromise agreement or compromise contract) is an agreement which, if it complies with stringent statutory conditions, enables an employee (or worker where appropriate) and employer to agree that an employee will not pursue a statutory claim or claims against his employer. This is usually in return for compensation for the employee.

If you have recently been involved in a dispute with your employer, or you are being made redundant then you may be offered a without prejudice i.e., ‘off the record’ meeting where they may offer a settlement or compromise agreement. You might be asked to sign a settlement agreement in exchange for an additional payment or other benefits. However, this is not always as straightforward a process as it sounds because this involves waiving off your rights to any claims you may have against your employer. Therefore, we would recommend that to protect your best interests, you seek professional advice.

At Aaryan Solicitors, we can assist you with signing the settlement agreement or negotiating a better settlement on your behalf.

What happens if you sign a settlement agreement?

You may have claims for Statutory redundancy pay, Enhanced redundancy pay, Notice pay, Pay in lieu of accrued but untaken holiday and a claim for unfair dismissal or constructive dismissal and claim for breach of flexible working regulations.

By signing the agreement, you will be waiving your rights to bring those claims and any other employment-related claims that you may have against the employer, its associated companies, or any of its or their officers, shareholders or employees in any jurisdiction and under the laws of any state arising.

You will also be waiving your rights to bring proceedings in the employment tribunal

What does subject to contract and without prejudice means?

The settlement agreements are marked as subject to contract and without prejudice.

This means that the agreement and any genuine discussions relating to settlement with the employer are confidential and cannot be relied on at court or tribunal.

Once signed, this agreement itself will become an open document which allows you, or the employer, to rely on the terms of this agreement at court or tribunal in the event of any dispute. However, the discussions leading up to signing this agreement may remain confidential.

What will your entitlement under the settlement agreement?

The Employer will pay you accrued salary up to the Termination Date.

You will be paid your salary up to the Termination Date less any outstanding sums you owe your employer. This will include but not limited to pay in lieu commonly known as notice pay and compensation (which is inclusive of the Employee’s entitlement to statutory redundancy pay).

Who is responsible for the legal costs of signing the settlement agreement?

Generally, the legal costs for an employee to obtain advise on the terms and effect of the settlement agreement are covered by an employer however these costs usually do not extend to negotiating amendments to the document on your behalf. Therefore, it is always sensible to obtain professional opinion on this, in which case Aaryan Solicitors would be delighted to assist.

When settlement agreement becomes binding on parties?

The agreement becomes contractually binding on the date that both parties sign it by after obtaining the legal advice.

Why do you need an independent legal advice before signing the settlement agreement?

In order for the agreement to be valid, you are required to receive advice from an independent adviser on the terms and effect of this agreement and its effect on your ability to pursue any complaint before an employment tribunal.

Your solicitor will need to provide you a certificate confirming that he/she given you such advice.

Why To Choose Aaryan Solicitors?