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Why Use a Settlement Agreement?

If you are in a situation where you need to dismiss an employee, always consider terminating the employment using a Settlement Agreement (known as a Compromise Agreement until 29th July 2013).

Settlement Agreements are a useful tool to provide protection against employment tribunal claims being brought against you in the future. If you are considering terminating the employment of one or more of your employees, you may wish to consider offering a Settlement Agreement. We can guide you through the process to ensure that you are protected from employment tribunal claims against you.

What does a Settlement Agreement do?

A Settlement Agreement sets out a full and final settlement for the benefit of you and the employee when an employment contract is ended. Settlement Agreements secure a 'clean break' for both employer and employee providing a practical and effective solution to the ending of a contract.

Advantages of Settlement Agreements:

  • Avoids costs of tribunal proceedings
  • Sets out terms agreeable to both employer and employee
  • Employee has the certainly of a settlement sum
  • Employer is protected against employment claims.
It is customary for an employer to pay the legal costs incurred by the employee, but only if the employee enters into the Settlement Agreement and the employer may limit costs to a specific amount.

Call Lawson-West's specialist employment advisers, Ashley Hunt or Vaishali Thakerar on 0116 212 1000 to discuss your needs and for specific advice on terminating employment.