What Should be Included in a Settlement Agreement?
If you are having issues at work, you or your employer can request for a settlement agreement to try to find a resolution to the issues you have been facing. In this article, we explain what should be included in a settlement agreement.
Settlement Agreements
A settlement agreement is a legally binding contract between you and your employer. It usually provides payment or some other kind of benefit by your employer in return for your agreement to not bring forward claims against them. The agreement is designed to protect your employer. Therefore, it is vital you seek independent legal advice.
The Legal Requirements of a Settlement Agreement
For a settlement agreement to be lawfully binding there are several legal requirements that must be achieved. To be a valid settlement agreement it must:
- Be in writing.
- Highlight what claims cannot be brought forward once it is signed.
- Confirm independent legal advice has been given in relation to the agreement.
- State that all legal requirements have been achieved.
In many cases, your employer will either pay for or contribute towards your legal fees to acquire independent legal advice about the settlement agreement. Your employer should make this clear in your settlement agreement offer.
For advice on the terms of your agreement please call one of our experienced employment solicitors on 033 3344 9603 or email us at [email protected].
So, What Should be Included in a Settlement Agreement?
Below, we explain what should be included in a settlement agreement:
- Termination Payment – The settlement agreement your employer offers you should include clauses on pay and any benefits you have negotiated with your employer. For example, outstanding salary and holiday pay accrued up to your termination date and if applicable the value of any bonuses, commission, and holiday pay, you may be owed.
- Non-disclosure or Confidentiality Clause – It is common for an employer to include a non-disclosure or confidentiality clause in your settlement agreement, because it is likely they want you to keep the details of your agreement private. These clauses should not only benefit the employer, but the employee too. Our employment solicitors will do their best to ensure these types of clauses are mutual, meaning your employer is not able to share the terms of the agreement.
- References – Although it is not a requirement, you may want your employer to include a reference in your settlement agreement, which is often helpful when applying for a new job. Some employers choose to give factual references including confirmation of your job title, your start and finish dates.
- Legal Costs – With a settlement agreement it is essential you seek independent legal advice; your employer may choose to include how much they will contribute towards the legal costs.
- Consequences of Breaching the Agreement – A settlement agreement is legally binding for you and your employer, which means if either you or your employer breaches the term of the agreement, there may be serious implications. Your employer may choose to include what happens if you breach the terms in your settlement agreement.
For further information on settlement agreements, please read our employees guide to settlement agreements.
Professional Employment Solicitors Leeds
Morrish Solicitors are a well-established law firm based in West Yorkshire with a national presence. We provide legal advice on employment law to private clients, Trade Unions, Associations, and their members. Our experienced employment solicitors can offer professional, confidential, and clear advice regarding settlement agreements.
We can provide advice on the wording of the agreement and identify any amendments that need to be made, either by telephone or in person. Also, we will highlight the impact the agreement will have on you bringing forward any claims against your employer in the future, usually the terms will mean you will not be able to bring any.
If you’d like to speak to one of our specialist employment solicitors regarding the terms of a settlement agreement, please contact us on 033 3344 9603 or simply email [email protected] with your request.
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