If you have received a settlement agreement from your employer it is really important that you fully understand the implications before you sign on the dotted line.
Settlement agreements are usually offered to employees in redundancy situations or when employers are looking to dismiss an employee amicably. They are legally binding agreements that set out the agreed terms of termination between an employer and an employee. They can also be initiated by employees but it’s commonly done by the employer.
The main outcome of signing this agreement is that your employment will be terminated immediately and you will lose some of your employment rights. In exchange of this, a sum of money is usually paid out to you as compensation.
But before you make a decision on whether you should accept or not, here is a list of things to take into consideration:
- The agreement is not binding until you sign it. Therefore, you are still entitled to enter into a pre-termination negotiation if you are unhappy with some of the terms or with the amount that is being paid out to you as compensation.
- Make sure that you are comfortable with any post-termination clauses. Post-termination clauses can be included in the settlement agreement if they aren’t already in the employment contract. They are contractual provisions that limit your activities after your employment has been terminated, like restricting you from securing employment within a certain radius of the company or with a known competitor.
- Request the inclusion of a written reference. Once your employment has terminated it might be harder to obtain a reference to give to future employers, whether you think you will need it or not, it can’t harm to request one just in case.
- Beware! Once signed, you are waiving your right to make an employment tribunal claim against the employer about any type of claim listed in the agreement.
- Last but not least. You DO NOT have to sign the agreement. They are voluntary and neither parties have to agree to them or enter into discussions about them.
Bryan & Armstrong Solicitors have an experienced employment department that are here to advise you throughout the process. Please contact us if you have further queries on 01623 624505 or email us at firstname.lastname@example.org.