In the workplace, it is inevitable that the issue of terminating employment will arise. When this happens one way to quickly resolve this situation, without it potentially escalating to a tribunal or court, is through a workplace settlement agreement.

Such agreements allow both parties to agree the terms of the termination between themselves.

In this article we will look at what workplace settlement agreements are, how they work, and how a solicitor may support both employers and employees in this process.

What is a Workplace Settlement Agreement for Termination?

A workplace settlement agreement is a legally binding contract between an employer and an employee to settle any potential claims arising from the termination of employment.

This agreement ensures that both parties agree to the terms of the employee’s departure and avoid future legal disputes such as claims for wrongful dismissal and discrimination.

Typically, a settlement agreement for termination covers the following key aspects:

• Amount of the payment, including how and when the payment will be made;
• The claims to be waived – with a warranty that the employee does not know of any claims they may currently have against the employer
• The claims which are not waived
• Termination dates
• Arrangements for the return of company property
• Confidentiality clauses
• Confirmation that the employee has received legal advice on the contents of the settlement agreement.

Why Choose a Workplace Settlement Agreement?

For employers: The settlement agreement will provide legal protections and prevent any potential future claim being made against them. Consequently, such an agreement will help to provide a quick resolution to the situation and even expediate the termination process.

For employees: The agreement can offer a level of financial security as financial compensation is usually a term of the settlement agreement. A settlement agreement will also allow the employee to avoid a potentially lengthy legal battle.

The negotiation process will also enable an employee to obtain terms in the agreement that are favourable and receive benefits that may not have been offered if no agreement was met.

The terms of such settlement agreements are kept confidential, allowing both the employer and employee to maintain their respective reputations, no matter what is agreed between the parties.

The Role of a Solicitor in Settlement Agreements

Solicitors are unable to advise both parties on the same agreement as there would be a conflict of interest in doing so. As such, one solicitor will only be able to advise either the employer or the respective employee regarding a settlement agreement.

For employers: Involving a solicitor early in the process will mean that the solicitor can assist in drafting the agreement to ensure that its terms are robust and that any potential future claims are prevented. Furthermore, a solicitor will be able to provide negotiation support throughout the process and ensure that fair terms are reached between the parties.

For employees: A solicitor will be able to assist employees facing a settlement agreement as a legal requirement for such agreements include that the employee must receive independent legal advice. Solicitors will be able to advise the employee if the contents of the agreement are legally sound, inform the employee of what is being offered by the employer and ensure that the employee’s rights are protected.

Furthermore, a solicitor can assist in any negotiation that the employee would like to undertake with the employer to request better terms and benefits under the agreement.

Conclusion

Workplace settlement agreements for termination offer a practical and efficient way to end an employment relationship while minimising the risk of a dispute escalating.

These agreements allow both parties to agree on the terms of termination, often with financial compensation, while avoiding the need for costly and stressful legal action. A solicitor can provide expert legal advice, help with negotiations and ensure that the settlement agreement is fair, legally binding and in line with current employment laws.

Professional legal advice is essential

How we can help

Whether you are an employer drafting an agreement or an employee reviewing one, our highly experienced Dispute Resolution team will advise on settlement agreements, to secure the best possible outcome for you. Call our team on 020 3440 8000 or email disputeresolution@tvedwards.com.