Settlement Agreements (formerly Compromise Agreements)
We are advising on more and more Settlement Agreements. These are a mutual termination of employment rather than a form of dismissal and/or resignation. They bind both parties in that the employee signs away their rights to bring a claim against your business in exchange of monetary compensation, and for you they give you that security that no claim or further legal expense will be incurred. Whilst they usually incur a cost of approximately £250 plus VAT fee to pay to the employee to obtain independent legal advice, and obviously the cost of drafting the document and providing advice in the first instance, this is usually vastly cheaper than risking a claim against the business and they are increasingly the preferred choice for employers and employees.
We can advise you from the very first thought that a Settlement Agreement might be relevant if you are looking to dismiss an employee and/or there is an issue with an employee that you are struggling to deal with. We can advise you on approaching those employees and have a “without prejudice” or “protected” conversation with them to see whether they would be amenable to entering into such an Agreement. We can draft the Agreement for you which must be tailored to that specific situation, and provide all advice and assistance to bring that to an end.