All About Settlement Agreement In UK

A settlement agreement between an employee and employer is intended to protect the employer from employee rights. In response, the employee gives up their right to claim that the employer has paid a set amount in compensation.

There are many other terms that can be included in the settlement agreement, such as intellectual property, privacy and restrictive agreements. Usually, the agreement is the legal instrument that terminates an employee's employment contract. This means there is no resignation, or dismissal.

settlement agreement

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Once the settlement agreement is in effect, it becomes a binding contract. It involves both the parties signing it and, generally speaking, the adviser signing an additional certificate. 

These provisions are contained in section 203(3), Employment Rights Act 1996. They also appear in many other pieces of legislation that provide additional protection for employees.

These include:

  • The agreement must be in writing

  • It must be associated with a specific case or complaint, i.e. list the possible claims that are being waived

  • It must state that settlement agreements have been made in accordance with the applicable statutory provisions.

The statutory safeguards exist to protect employees in these circumstances. Therefore, the employer does not have to seek legal advice. This would be a practical option in many cases. Both parties should instruct a specialist employment lawyer to protect their rights and ensure they understand their legal obligations.

Settlement Agreement Lawyers in London UK can help you to negotiate and draft the terms of a settlement.