Settlement Agreements

What is a Settlement Agreement

It is difficult sometimes to get rid of an employee. The law requires you go through a process that sometimes can be very lengthy. There is a quicker way to do this: settlement agreements.

What is a settlement agreement?

A settlement agreement is the name of an agreement that can be a very neat and tidy, albeit sometimes expensive way to part company with an employee. It is an agreement where you give the ex-employee money, and they agree not to sue you.

You can use a settlement agreement at any time in the employment relationship, whether there is already a dispute (disciplinary, grievance) or not (they are just not suitable for the role, but you know they will kick off if you try to dismiss them).

Why would I need a settlement agreement?

The aim of a settlement agreement is to part company quickly whilst you take away the employee’s ability to sue you at employment tribunal, for almost anything related to their employment.

For them to give up this right, you have to give them money. The settlement agreement sets out clearly what monies they will get, and what rights to sue you they have given up.

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