5 Things to Check in a Settlement Agreement

January 27th, 2022
Chloe Beevers
Employment

5 Things to Check & Double Check in a Settlement Agreement

Our experienced Employment Solicitors frequently advise on settlement agreements. They can be offered in cases of voluntary redundancy or other scenarios where compensation is to be paid in return for an agreement not to pursue any claims against the employer.

In this article, our Employment team have put together the following tips to help if you or someone you know has been offered a settlement agreement.

5 Things to Check in a Settlement Agreement

The settlement package numbers are right – Once signed, the Settlement Agreement becomes legally binding and, more importantly, final. When considering your employer’s settlement offer you must make sure you are happy with the money on offer. You should also check for non-monetary benefits such as continuing healthcare, travel facilities, a reference (discussed more below) or being released from post-termination restrictions.
When you’ll be paid – Once the Settlement Agreement is signed by all parties compensation is normally paid within 21-28 days of the termination date. However, some payments may be made through payroll on the usual payroll date. Such payments could include outstanding holiday pay, salary pay or any bonuses and commission.
Excluded claims – The purpose of a Settlement Agreement is to settle all actual or potential legal claims that an employee has or may have against an employer. Employers may look to exclude you from bringing future claims of any kind. It is important that certain claims are not excluded, including latent personal injury claims (discussed more below) and claims in respect of accrued pension rights. This is because at the date of signing, you may not be aware of certain injuries suffered or exposure to dangerous chemicals for example, but health issues may arise because of them in the future. Non-disclosure or confidentiality clauses can also be pretty standard features of a Settlement Agreement. However, they can be drafted in a way that prevents you from telling your wife or immediate family members who might be supporting you through the process. There should also be exclusions for making whistleblowing disclosures, telling statutory bodies or regulators and the Tribunals and Courts.
Personal injury claims – As explained above, an employer may look to settle all existing personal injury claims within the Settlement Agreement. However, if you have suffered an injury at work it will be essential to exclude any ongoing claim, so that you can continue to pursue it. It is also important that any latent personal injury claims are excluded and not settled. This means any personal injury claims you are unaware of at the time of signing the agreement. Examples include asbestosis, mesothelioma or occupational deafness.
Agreed reference terms – There is no general legal right to a reference however some regulated sectors will place a duty on an employer to provide a reference. You might be able to negotiate an agreed reference as part of your Settlement Agreement. Where a reference is agreed, it means your employer cannot lawfully provide an alternative (negative) reference to a prospective new employer.

Our employment solicitors specialise in settlement agreements, we will thoroughly go through the terms of your agreement with you and provide professional, confidential and honest advice. It’s important to take independent legal advice from experts in Employment Law before signing a settlement agreement.

If your employer has offered you a settlement agreement, contact our experienced employment solicitors on 033 3344 9603.

Specialist Employment Solicitors

Morrish Solicitors is a long-established law firm based in West Yorkshire providing a range of legal services to private clients, Trade Unions, Associations, Professional Bodies and their members. We have a highly experienced team of employment solicitors specialised in all areas of employment law. Our employment team can advise you on: