A settlement agreement is one of the most cost-efficient and risk-free ways to bring an employee’s employment to an end. The main benefit of using settlement agreements is that it ensures employees cannot bring any legal claims against you in the Employment Tribunal or other courts.
When Can a Settlement Agreement Be Used?
A settlement agreement should be drafted so it is tailored to your business and the particular circumstances that have arisen. It is very important that you do not use previous precedent documents because what is correct in one scenario may not be correct for all.
All settlement agreements drafted by BRM are fully compliant with the latest legislation, and are tailored to the specific circumstances.
Quite often, a without prejudice conversation will take place with an employee, although this is not always appropriate and is only possible where there is a dispute. Where there is no dispute an employer can have a “confidential conversation” (also known as “protected conversations”) with the employee in question.
Provided the employer follows the correct steps, discussions with employees under a confidential conversation cannot be used in evidence to pursue certain claims against you in the Employment Tribunal. It is important that you seek advice before having a confidential conversation or protected conversation to ensure you follow the necessary steps.
Examples of when a Settlement Agreement can be used:
- Redundancy/voluntary redundancy
- Problem employee/ongoing disciplinary process
- Long-term absence/short-term persistent absence/illness/capability
- Performance management issues
- Receival of an ACAS early conciliation notification or an Employment Tribunal claim
- Director and/or shareholder issues
- Terminating a contract of employment before the end of the contractual notice period or during a fixed term employment contract
- Where someone has raised a grievance
- Mutual agreement
When you instruct our Employment Team to prepare a settlement agreement for your business, we will also deal with any queries you receive on your behalf.
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