Settlement Agreements

Settlement Agreement Solicitors Aberdeen & Stonehaven

A settlement agreement is a legally binding agreement made between an individual and their former employer. It establishes that, following the conclusion of a term of employment, an employee will not be permitted to bring legal action against their former employer.

When will a settlement agreement be used?

Settlement Agreements are usually used as a way to settle disputes and avoid lengthy and costly legal proceedings. They may be used, for example, to settle potential claims for unfair dismissalunfair dismissal or discrimination. In these agreements, the employee agrees not to pursue a claim or claims against the employer, usually in return for a payment of compensation to the employee. The agreed terms also typically involve the mutually agreed termination of the employee's employment.

Advantages of signing a settlement agreement as an employee

Settlement Agreements offer many benefits, including peace of mind. The main ones are:

  • Compensation is tax-free up to £30,000
  • Your employer pays for the legal advice
  • All the rights and obligations are in one document
  • Protection of reputation and a reference
  • Avoiding litigation risk, uncertainty and delay
  • Avoiding stress

An advantage for both parties of a settlement agreement is certainty to offer a clean break. For the employer, there is the benefit of knowing that the employee will not be able to bring a claim unless there has been a misrepresentation of the reasons for the termination. For an employee, taking a claim to an employment tribunal can be lengthy and stressful without any guarantee of a satisfactory result.

The benefit of a settlement agreement is the employer and employee can negotiate to achieve a mutually acceptable outcome without the involvement of a tribunal or court.

Statutory requirements

Settlement Agreements need to comply with certain statutory requirements to ensure that the right to make a claim is extinguished.  For an employer, it is important that the agreement conforms to all the necessary formalities. It also deals with several obligations on the part of the employer, including the arrangements regarding an employee's notice period, the amount of compensation for loss of employment, payment for holiday pay and other benefits.

It is a legal requirement that an employee receives independent legal advice before signing a settlement agreement. For an employee, we can provide guidance on the merits of any possible claim. Our experienced employment solicitors can consider the terms and conditions of the proposed agreement, along with supporting documentation such as information on pay and any benefits in kind, to advise appropriately.

The employer normally pays, or makes a contribution for this advice.

How can James & George Collie help?

We advise both individuals and businesses on employment matters and have the expertise and experience to help you. Our services include:

  • reviewing and providing advice on the prospects of claims;
  • negotiating and finalising the terms of an agreement;
  • providing representation at an employment tribunal or court claim become necessary.

Contact our Settlement Agreement Solicitors in Aberdeen

Our experienced lawyers can provide expert advice on all aspects of employment law, we will meet with you and review in detail all the terms of the settlement agreement to ensure that you understand and are happy with its terms.

If you have been offered a settlement agreement or are just looking for information and advice, please contact our team of employment lawyers on 01224 581581 or by completing our online contact form.

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