Settlement agreements

We have a wealth of experience when it comes to the negotiation, drafting and conclusion of settlement agreements.  

Effective, tailored approach       

Also known as compromise agreements and severance packages, settlement agreements are now frequently used in connection with the termination of an individual's employment – particularly those in more senior positions.

In many situations where difficulties have arisen in a working relationship with an employee, it can be a commercially wise decision to approach an employee ‘off the record’, to explore the possibility of them agreeing to leave the business by mutual agreement in return for a one-off payment. By signing a settlement agreement, your employee would formally agree to walk away from their employment and waive their rights to bring an employment claim  in exchange for a one-off payment from you. Settlement agreements are also often used to bringing employment to a swift end in redundancy cases, without the need to go through a protracted formal redundancy exercise.

Employers do need to exercise caution however when contemplating offering a settlement agreement. You must broach the subject carefully, through a ‘protected’ or ‘without prejudice’ conversation. There can be risks associated with having these conversations with staff and so it is important that you speak to an experienced specialist employment solicitor before you approach an employee.

A settlement agreement is a lengthy and complex document which needs careful drafting. Unlike many lawyers and HR Advisors who simply rely on standard 'off the peg' documents, we take care to ensure that the settlement agreements that we draft are tailored to suit each particular situation. Adopting this approach helps to minimise the potential for delay and enables us to ensure that all relevant claims are settled.