Settlement Agreement Advice for Employers

Settlement agreements are a useful legal mechanism to ensure that an employee and employer part ways on amicable, mutually agreed terms. Our expert Settlement Agreement Solicitors can assist employers with every stage of the process to ensure the matter is resolved quickly and efficiently.

At Butcher & Barlow, our practical approach to employment law is backed by keen legal expertise and a determination to secure the best possible outcome for our clients. We will take the time to understand the needs of your business and the way you want negotiations with your employees to be handled.

Our Employment law experts will provide clear advice on your rights and what you can expect to achieve, answering any questions you have along the way.

Have a question? Please see our settlement agreement FAQs or get in touch.

Our experts can help you with matters including:

Drafting settlement agreements
Representation for settlement negotiations
Acas early conciliation

Contact our Solicitors for settlement agreements in the North West of England

To access specialist legal advice on settlement agreements, please contact us at Butcher & Barlow.

You can call us on +0161 764 4062 or email enquiries@butcher-barlow.co.uk.

Our settlement agreement services

Drafting settlement agreements

If you are entering into a settlement agreement with an employee, it is advisable to seek independent legal advice to ensure the document is drafted with fair terms that protect your business.

Our independent advice for employers ensures the settlement agreement is fair, legally sound, and compliant with employment law.

Our solicitors can help you draft clear, enforceable terms that protect the business from future claims while offering appropriate compensation to your employees.

Representation for settlement negotiations

If you have a drafted settlement agreement that your employee wishes to negotiate, we can offer you expert legal representation to protect the interests of your business.

This representation ensures that the agreement protects your business and minimises the risk of future disputes.

Our Solicitors provide strategic settlement agreement advice and ensure all legal requirements are met.

Effective representation can help you reach a mutually acceptable resolution and protect your business from potential legal repercussions.

Acas early conciliation

Acas early conciliation for employers is a free, confidential service offered by the Advisory, Conciliation and Arbitration Service to help resolve workplace disputes before they escalate to an employment tribunal.

Employers can engage in early conciliation to negotiate a settlement agreement with employees or former employees, facilitated by an Acas conciliator.

The process aims to find a resolution both parties are satisfied with, saving time and legal costs associated with tribunal proceedings.

It allows employers to address and settle disputes efficiently, maintaining workplace relationships and minimising potential reputational damage while ensuring compliance with employment law.

Our Settlement Agreement Solicitors can support you through the Acas early conciliation process, helping you prepare for the negotiation and reviewing any agreed terms.

Frequently asked questions about settlement agreements

What is a settlement agreement?

A settlement agreement for employers is a legally binding contract between an employer and an employee, used to resolve disputes and terminate employment on mutually agreed terms.

By signing this agreement, the employee waives their right to bring any future claims against the employer in exchange for specified compensation.

Employers use settlement agreements to ensure a clear, definitive end to employment, often including terms such as confidentiality clauses.

The agreement must comply with legal requirements, including the employee receiving independent legal advice, to be valid and enforceable.

When should an employer offer a settlement agreement?

Settlement agreements are often used to prevent legal claims before they arise, such as unfair dismissal during the redundancy process, constructive dismissal during misconduct investigations or if the employee has a discrimination claim. They can also be used to resolve a claim that has been referred to the employment tribunal.

Although settlement agreements are most commonly used to terminate employment contracts, they can also be used as a dispute resolution tool to address conflicts in the workplace without ending employment.

What are the benefits of settlement agreements for employers?

A settlement agreement can be used to avoid the cost, uncertainty and time involved in escalating a dispute to the employment tribunal and attending a full tribunal hearing.

In many cases, it is in the interests of both parties to negotiate the terms out of the tribunal. However, the law does specify that employees must have independent legal advice before signing a settlement agreement to ensure that the terms they are agreeing to are fair and do not unnecessarily restrict their future employment opportunities.

Where there is a breach of contract or the law and the process cannot be resolved internally or through alternative methods, a settlement agreement can be used to bring the matter to a close by terminating the employee’s contract of employment on mutually acceptable terms.

What should be included in a settlement agreement?

The details that an employer should include in a settlement agreement will depend on your individual circumstances.

Our Settlement Agreement Lawyers can help you draft an agreement that is tailored to your situation and the nature of the dispute.

However, some general terms that are commonly included in settlement agreements are:

Details of termination

The details of the termination include the length of the employee’s notice period, whether they will be expected to work the whole notice, when their last day of work will be and any handover responsibilities they will be expected to fulfil before then.

The last day is considered a definitive end day of the employment. The agreement should state when the employee will be paid their final amount and outline any responsibilities they should fulfil before leaving to ensure a smooth transition.

Compensation

An important part of a settlement agreement is including details of the compensation you are offering the employee.

This includes the total settlement amount to be paid to the employee, a payment schedule, and any benefits they will continue to receive such as health insurance or pensions.

This ensures the other party knows exactly what financial compensation they will receive if they choose to accept the settlement agreement.

Confidentiality clauses

Confidentiality clauses you may decide to include in the agreement include non-disclosure agreement terms, confidential information, and the scope and duration of confidentiality obligations.

These clauses ensure that both parties are clear on the terms of the agreement and help to prevent breaches going forward.

Non-disparagement

Non-disparagement clauses are an agreement between both parties not to disparage or damage the other party’s reputation.

This may include agreements such as not making negative or harmful statements to protect the company’s reputation and the employee’s future job prospects. These clauses essentially provide a clean break for both parties.

Future claims

An important part of a settlement agreement is addressing future claims. Typically in accepting the agreement, the employee waives their right to make future legal claims about their former employment or its termination.

However, the agreement will also include the details of any claims that cannot be waived to protect the employee.

References

The settlement agreement may include a standard reference letter that has been agreed by both parties.

Where a reference has been included, the employer will typically agree to provide this upon request to any future employers.

How can employers negotiate settlement agreement terms with employees?

Settlement agreements are commonly reached through negotiations. Effective negotiations can prevent disputes and help both parties reach a resolution without the need for litigation.

It is important to give both parties the opportunity to fully review the proposed agreement before entering the negotiation stage.

If you are looking to enter into negotiations with an employee to reach a settlement agreement, it is advisable to seek advice from an experienced Settlement Agreement Solicitor to ensure the process goes smoothly.

Your Solicitor will take the time to understand the outcome you are trying to reach and can then represent you in negotiations with the other party’s Solicitor, with the aim of reaching a mutual ground that both parties are satisfied with.