Formerly known as a “compromise agreement”, this is a written agreement by which an employee gives up his or her entitlement to bring an employment claim or claims. The employer who is the other party generally agrees to make some form of financial payment, often provides an agreed form of reference, and may provide other benefits such as outplacement support to help the employee find another job. It is usual for employers to pay a contribution to the employee’s legal costs in obtaining independent advice. The employee must obtain independent legal advice from a lawyer for the agreement to be binding. This is a safeguard against the employee giving up valuable rights for insufficient compensation. Typically settlement agreements contain confidentiality provisions and clauses requiring each party to refrain from making derogatory comments about the other. Good independent advice is invaluable for employees and employers. We are happy to negotiate and advise on settlement agreements.
