Do you wish to end an employment relationship but it’s unlikely a fair dismissal could be achieved? Are you dealing with a difficult employee or issue and there is a risk of a claim? Are you finding a formal process such as a redundancy procedure or performance management process too slow or burdensome?
If the answer is yes to any of these, or your organisation is facing other challenging employment law situations, you may want to think about whether a settlement agreement could be beneficial for your organisation.
1. What is a settlement agreement?
Broadly, a settlement agreement is a legally binding contract, voluntarily entered into by an employer and employee that prevents an employee from making a claim that is covered by the agreement to an employment tribunal or court. In most cases the settlement agreement is used to terminate the employee’s employment. The employee usually enters into the agreement in exchange for a payment from the employer.
2. Are there requirements that need to be met?
For a settlement agreement to be legally binding there are certain requirements that need to be met, these include that the agreement must be in writing and the employee must receive independent legal advice on the terms and effect of the agreement.
As you would expect, it’s important that settlement agreement matters are handled appropriately, but employers shouldn’t be daunted by this option as settlement agreements can be a useful commercial tool for employers.
3. We are considering using a settlement agreement, what should our first step be?
If you think you may wish to use a settlement agreement in your organisation you should contact Kingfisher Professional Services Ltd for further information and advice on your situation, before taking any action, including broaching the matter with the employee.
We offer a cost effective settlement agreement service. As part of this we can advise you on the facts of your case, including settlement agreement discussions and the rules around these, draft a bespoke settlement agreement to meet your needs and negotiate with the employee’s representative on your behalf in accordance with your instructions.
If you would like further information regarding settlement agreements, including the fixed fee in place for our settlement agreement service, please contact us as we will be happy to help.