Settlement Agreement Guidance Notes
Settlement agreements (previously called compromise agreements) are documents that set out the terms and conditions agreed by the employer and the employee to settle a potential employment tribunal claim or other court proceedings. The employee agrees not to pursue claims against the employer, in return for a financial settlement. The objective for the employer is to avoid the cost of lengthy or divisive litigation arising out of an employment tribunal, as well as avoiding any reputational damage. A Settlement Agreement contract is legally binding on the parties.
The sections covered in the Guidance Notes include:
- What are settlement agreements?
- Validity of settlement agreements
- Independent Adviser
- Tax implications of settlement agreements
- ‘Without prejudice’ and ‘Subject to Contract’
- Protected conversations
- References
- Time to consider a settlement agreement
- Confidentiality
- Claims that cannot be settled by a settlement agreement
These Settlement Agreement Guidance Notes provide additional information to assist employers in the use of the Simply-Docs suite of settlement agreements. See also the Information Page on Settlement Agreements, which can be found here.