Settlement Agreement
We will explain the terms of your settlement agreement to you so you understand the nature of your agreement and the payment you will receive. We ask you to send us your agreement to review and when you are satisfied we will arrange signing. We aim to work within the employer’s contribution to costs so there will be no charge to you. In the first place please call on 0208 789 2556 or 07851306136 or use our online enquiry form
Settlement Agreements were previously known as Compromise Agreements. They are agreements made between an employer and employee mainly to settle any dispute or to finalise leaving terms. The employee normally receives a sum of money and in exchange agrees not to pursue any legal claim against the employer. The settlement agreement specifies the terms (hopefully acceptable) of the settlement, the amount of monies received and the post termination restrictions particularly relating to competing and confidential information. These clauses have to be reasonable or else the employer will be unable to enforce them. The employer is allowed to protect a business interest and may restrict the geographical location for working, access to clients but it has to be reasonable to be enforceable.
The agreement protects the employer providing certainty that there will be no legal claim by the employee over the dismissal. The employee receives a payment usually a lump sum or ex gratia payment, exempt from tax if below £30,000. Normal salary payments including the notice period and any untaken holiday will be subject to tax.
The employee must be independently advised by an independent legal adviser on the terms of the settlement agreement. The reason is that the employee must be subject to no undue influence and a solicitor must certify in writing that this is the case. Normally the employer provides a contribution towards the legal fees and we aim to ensure our client has no further fees unless the matter proceeds further to litigation.
Upon signature of the Settlement agreement by our client we will send the agreement and advisor’s certification to the employer. Some clients prefer to deliver it themselves to the employer others prefer us to take over the remaining stages. We also include an invoice marked payable by your employer as part of the settlement so payment will not be sought from you.
In the first place we ask for copies of the draft settlement agreement to be sent to us. Upon review of the agreement we will make our recommendations. When you are satisfied with the agreement we will then arrange signing.
Call Brian on 0208 789 2556 or use our online enquiry form