Severances and settlement agreements
Are you concerned that an employee who is about to leave your business may have a possible claim against you? Would you like to agree a financial sum upon their termination to prevent them from bringing such a claim?
Whether you are considering dismissing an employee or you believe that an employee may soon decide to leave your business, it is beneficial to consider whether they may have any claim against you such as unfair dismissal, discrimination or unlawful deduction of wages. If you believe that it is possible that an employee may have such a claim you may wish to consider agreeing a severance package with the employee and asking them to enter into a settlement agreement to renounce said claims.
What is a settlement agreement?
The basic position is that the right of an employee to pursue a matter in the tribunal cannot be excluded. An exception to this rule is where a formal settlement agreement, fulfilling strict statutory requirements, has been entered into. Settlement agreements can be used to end an employment relationship on agreed terms or to solve a dispute in an ongoing employment relationship.
Why would my business need a settlement agreement?
Once a valid settlement agreement has been signed by both parties, an employee will be unable to make an employment tribunal claim in relation any type of claim which is listed in the agreement. In the absence of a settlement agreement an ex-employee may be able to bring a claim against your business months or years into the future.
How much would a settlement agreement cost?
The cost of a settlement agreement depends on how complicated the agreement is and how much negotiation is required prior to all parties agreeing to the terms. We will, however, provide you with a full costs update throughout so that there are no surprises.
How can Moore Blatch assist me?
Due to the strict statutory requirements, it is important that you instruct a solicitor to ensure that the settlement agreement is legally compliant. If the Agreement fails to comply with the legislation, the waiver within that agreement will be void for certain claims, meaning that an employee could still bring certain claims against the business.
The team at Moore Blatch have a vast range of experience in drafting, advising on and negotiating the terms of settlement agreements. Our expertise and experience range from simple, straight forward agreements to complex, contentious ones meaning that we can advise any business in relation to any form of dismissal. Our in depth knowledge means that we can direct you to the most pragmatic and commercially sound way to dismiss staff, so that you are able to focus on running your business.
For more information please contact Katherine Maxwell or Naomi Greenwood.