A Settlement Agreement (formerly called a Compromise Agreement) is a legally binding agreement, usually between an employee and employer, setting out the financial and all other terms on which the employment relationship will end. This might be for reasons of redundancy, dismissal or by mutual consent. Usually, the Settlement Agreement provides for a severance payment by the employer, in return for which the employee agrees not to pursue any claim he or she may have to an employment tribunal.
Settlement Agreements are useful in circumstances where the employer wishes to avoid the costs or uncertain outcome of an employment tribunal. This subfolder includes different Settlement Agreements suited to employees at different levels of seniority within the company.