Settlement Agreements – Glossary of Terms
Been offered a settlement agreement by your employer? There may be some terms used in the document that you are unfamiliar with. Our specialist Employment Solicitors have put together this easy-to-use guide explaining explaining the common terms used in settlement agreements.
Settlement Agreements Glossary
Adviser – the legal adviser to the employee, normally a solicitor.
Adviser’s Certificate – the document normally attached to the Settlement Agreement, often on the adviser’s letterheaded notepaper, completed by the adviser to show the adviser has advised the employee on the terms and effect of the Settlement Agreement.
Augmented – making an additional payment, typically into a pension.
Company Property – the property of the employer such as security passes, name badge, uniform, laptop, mobile telephone and company car.
Compromise Agreement – the old term for a Settlement Agreement.
Confidentiality – not disclosing or revealing information such as trade secrets or pricing.
Counterpart Document – one of multiple copies of a legal document (each can be signed separately to make one agreement).
Defamatory – the employer and employee often agree not to make defamatory comments (untrue or misleading comments likely to damage reputation) about each other.
Derogatory / Disparaging – the employer and employee often agree not to make derogatory or disparaging comments (offensive or belittling comments) about each other.
Governing Law – the law that applies to the Settlement Agreement, such as the law of England and Wales.
Indemnities – an agreement to reimburse or repay for loss or damage or taxation.
Jurisdiction – the countries covered by a Governing law, such as the jurisdiction of England and Wales.
PILON – Payment In Lieu Of Notice.
Restrictive Covenants – restrictions to prevent, for example, the employee competing directly with the employer after termination of employment for, typically, 12 months. Covenants could also cover confidentiality and/or solicitation (i.e. poaching) of colleagues.
Settlement Agreement – the agreement to resolve a legal dispute or to agree termination of employment.
Severance – termination of employment.
Subject to Contract – wording used to indicate that any agreement is only binding once the terms of the contract have been agreed.
Termination Date – the date on which the employee’s employment terminates.
Third Party Rights – only the employee and the employer are able to enforce contractual rights under the agreement unless the settlement agreement confers rights on others such as subsidiary or group companies of the employer.
Waiver of Claims – the dropping of legal claims.
Warranties – legal promises that are to be given by the employee as part of the settlement.
Without Prejudice – a term to describe settlement negotiations that can’t be shown to the Tribunal/Court.
Settlement Agreement Solicitors
If you’ve been offered a settlement agreement by your employer it is a legal requirement you seek independent legal advice in order for the agreement to be legally binding. Our experienced employment solicitors have many years’ experience in advising about such agreements.
Normally, your employer will pay the legal fees for you to obtain the advice about the settlement agreement.
Contact our employment team today on 033 3344 9603 to discuss the terms of your settlement agreement or simply email [email protected] with the details of your request.
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