What Is A Settlement Agreement?

By Carlin Peton

A settlement agreement brings the relationship between employer and employee to a formal end. It records in detail any settlement that you have reached with your former employer. If you sign a settlement agreement you waive your right to bring legal action against your former employer, in exchange for a financial payout.

For the settlement agreement to be legally binding the following conditions must be met.

  • The agreement must be in writing.
  • The agreement must relate to a particular complaint or proceedings.
  • The employee must have received advice from a relevant independent adviser, such as a lawyer or a certified and authorised member of a trade union.
  • The independent adviser must have a current contract of insurance or professional indemnity covering the risk of a claim by the employee in respect of loss arising from the advice.
  • The agreement must identify the adviser.
  • The agreement must state that the applicable statutory conditions regulating the settlement agreement have been met.

What is the first step?

The first step in the disciplinary process may be an informal warning, for example for persistent lateness, which gives the employee the opportunity to improve their conduct.

The disciplinary procedure will usually consist of the following:

  • A letter that puts the matter in writing.
  • A disciplinary meeting.
  • A disciplinary decision.
  • The opportunity for you to appeal this decision.

Settlement Agreement meeting

You may be accompanied to this meeting, although you must inform your employer in advance if you intend to take somebody with you. Such as a work colleague or a trade union representative.

A decision will be made, and a disciplinary action may be taken against you. Although you will have the right of appeal.

If you have been unfairly dismissed or unfair deductions have been made to your pay, you can make a claim to an employment tribunal.

You must do it within three months of the termination of your employment or the disciplinary decision.

We can help you

It is essential to get a legal advice at the earliest opportunity. Ackroyd Legal have a number of years of experience in helping employees to get what they want with their settlement.

If you are in a position to check over your offered package and need a quick turnaround, one of our solicitors will be more than happy to help you.

Please feel free to contact our client services department via our enquiries page, or give us a call 0203 058 3365.