Settlement Agreements – Distinctiveness is the key to success.

by Hudson Mckenzie Lawyers and Solicitors who understand you

Settlement agreements emerge out as a very vital element for an employer. They typically sketch a line under the employment relationship and enable certainty that an employee will not bring any employment- associated claims. Such an agreement is often employed to reach a full and final settlement of any claims which the employee has or may have arising out of the employment and its termination, subject to certain exceptions such as claims for personal injury or accrued pension rights.

While parties may agree that a settlement agreement will also cover any future claims which an employee does not and could not know about, to do so effectively the terms of the agreement must be absolutely plain and unequivocal. The agreement will also set out what the employee can and cannot do after termination of employment. With every word likely to be scrutinized in case of a future dispute, the stakes are high and employers and their settlement agreement lawyers in London must be careful and thorough when drafting such agreements.

Employers must need to keep in mind that there is no 'standard' settlement agreement. Although an employer may have used the same document for years, employment laws and best practice change over time, and one size rarely fits all. It is therefore vital to make sure that a settlement agreement is tailored to the specific circumstances of an employee's departure.

The role of settlement agreement lawyers in London is of great important when it comes to achieve the desired level of success.

It’s always advisable to obtain legal advice from one of the leading settlement lawyers in London, who can discuss your circumstances and talk through the terms of the settlement offer and the terms of the proposed Settlement Agreement with you. The Employment Solicitor could then negotiate with your employer on your behalf to ensure that you receive a fair Settlement Agreement.

Your employer will usually pay for you to get legal advice regarding your Settlement Agreement and for an Employment Solicitor to review the draft agreement once drawn up. This would not include negotiations being carried out on your behalf – you would usually be liable to pay for any negotiations yourself.

Not all claims can be settled by means of a settlement agreement or COT3. For example, claims for failure to inform and consult with appropriate representatives on collective redundancies and under the Transfer of Undertakings (Protection of Employment) Regulations 2006 cannot be settled via a settlement agreement (although Acas can conciliate in relation to such claims). Nor is it possible to exclude rights relating to statutory maternity pay (SMP), statutory paternity pay, statutory adoption pay or statutory shared parental pay, as was recently confirmed by the First-tier Tribunal (Tax Chamber) in Campus Living Villages UK Ltd v Revenue and Customs Commissioners.

All Settlement Agreement negotiations that take place between you and your employer are confidential. As a general rule, it is not possible for either side to use this correspondence in an Employment Tribunal. However, to be on the safe side, it’s a good idea when negotiating in writing to state that you are discussing the matter “without prejudice”. The inclusion of this legal term means that the discussion is taking place off the record, and as such it cannot be used as evidence in an Employment Tribunal.