- Settlement Agreements are offered on a without prejudice basis
This means that the conversations regarding the offer of a settlement agreement and the agreement itself is considered 'off the record' and cannot be referred to in any open HR process or any future litigation.
Once the settlement agreement is signed it is then treated as an open binding document.
- There is a legal requirement for the settlement agreement to be explained by a relevant adviser
A settlement agreement brings employment to an end and includes a number obligations that you will need to seek advice on. You will also be agreeing to waive your rights to claims against your employer. It is a requirement to obtain advice from a relevant adviser on the terms and effect of a settlement agreement in order for the settlement agreement to be considered legally binding.
- It is possible to negotiate on the terms of a settlement agreement
There may be scope to negotiate further with your employer on the terms of the settlement agreement if you are not happy with what has been offered to you.
To negotiate on a settlement agreement you will need some form of leverage which could include the threat of potential employment tribunal claims or the fact that your employer will need to carry out a lengthy HR process as an alternative to entering into a settlement agreement. The realities of having to deal with these processes, including the cost, often draws employers into negotiating further.
- Your employer normally contributes towards your legal costs
Normally employers offer a contribution towards your legal fees for having the agreement explained to you. This should be set out in the settlement agreement itself.
- Confidentiality clauses are typically included
There may be a clause which prevents you from disclosing information regarding the settlement agreement and prior conversations apart from to your immediate family, anyone who owes you a duty of confidentiality (i.e. legal or medical professionals) or for the purposes of complying with a legal obligation.
A clause preventing you from making any derogatory comments about your employer is also often included.
Both clauses can be mutual i.e. they can also apply to your employer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
