When your employment with a particular employer ends, you may be asked to sign what is called a settlement agreement. This is a legal document that stipulates the conditions for parting company and is commonly used in cases such as redundancy where an employee is given a financial sum as compensation.
The agreement needs to be in writing and they are normally offered by the employer. The reason for producing such a document is to ensure that the employee doesn’t later decide to take the employer to court for something like wrongful dismissal. It also gives the employer the chance to put in certain stipulations, for example, that the employee won’t seek to be newly employed by the company for a certain period or won’t discuss the manner of their dismissal with third parties like journalists.
In order for any settlement agreement to be binding, the person being offered it needs to get input from an independent advisor. This is normally a qualified solicitor with indemnity insurance which protects them against giving negligent advice. Settlement agreements are voluntary but once it has been signed by the employee they are legally binding.
Contacting a Solicitor
A lot will depend on the conditions of your settlement agreement as to what advice you need from your legal team. In many cases, employers will cover the cost of contacting a solicitor and you will not have to pay anything, especially in the case of redundancy.
Your independent advisor will take a look at the legal framework and wording of the settlement agreement and explain any areas that you need to know about. Once they have discussed the document with you and you are happy to sign, they will return it to the employer.
If all the conditions of the settlement agreement are met, particularly by the employer (which includes any financial payment), then both parties can go their separate ways. The employer must be specific on which potential claims that the employee is likely to make, the most usual being taking the company to court for unfair dismissal. These sorts of agreements generally need to be tailored to the individual rather than a blanket, standard document.
At Forster Dean, we have many years’ experience dealing with all aspects of settlement agreements, particularly if you are being made redundant. You cannot be forced to sign the agreement against your will and we’ll go through all the small print so that you are aware of what you are signing and what your rights are.
In most cases with reputable employers, the signing of a settlement agreement is a fairly routine process and one that should not cause you too many problems. With Forster Dean, you can be sure of getting an independent advisor who knows what they are talking about and you can be certain everything important has been covered.
Contact our friendly legal team today if you need us to deal with your settlement agreement.
