Settlement agreements, formerly known as compromise agreements, are a binding written agreement between an employee and their employer under which the employee agrees to settle an employment tribunal claim that they have or potentially have against their employer.
Employers and employees enter into a settlement agreement where the employer pays the employee a sum of compensation and the employee gives up their right to bring a tribunal claim or discontinues any proceedings that have been commenced. The agreement will often provide for arrangements for return of property and agree terms of a reference.
The employee must go to their own independent solicitor or advisor for advice and the employer usually pays for the advice as part of the agreed package.
The law allows some discussions between employers and employees to be conducted in a without prejudice way that cannot be referred to in any subsequent tribunal proceedings.
If you have been offered a settlement agreement by your employer you need to seek independent legal advice.
It is important that you seek independent legal advice before signing a settlement agreement, and also a legal requirement. Once you sign the agreement you will not be able to make a claim against your employer at the employment tribunal.
Normally your employer will agree to pay for you to receive independent legal advice.
You can arrange an appointment to see an employment lawyer for advice about your settlement agreement at our offices in London EC2, or Potters Bar, Hertfordshire.