What is a Settlement Agreement?
At MyBump2Baby we are proud to link together growing families with family law solicitors throughout the UK. Today we have a guest post from our trusted family law solicitors in Liverpool, Paul Crowley solicitors. They share an article on what is a settlement agreement.
In the current economic climate, due to pandemic restrictions many companies are having to make changes, one of those changes is letting employees go and with this, the employee is asked to sign a settlement agreement, but who knows what a settlement agreement entails, so read on and we will tell you.
A Legally Binding Contract
A Settlement Agreement, previously called a Compromise Agreement, is a legally binding contract between an employer and an employee. An employer will provide a settlement agreement to an employee usually to secure a clean break at the termination of a person’s employment.
In return for financial compensation, the agreement will deal with any claims an employee may have against the employer. Once a settlement agreement has been signed the employee will surrender any future claim against the employer in relation to the termination of their employment, such as discrimination or unfair or wrongful dismissal.
Employment Lawyer
For a settlement agreement to be valid, it is important that the employee seeks independent legal advice and consults with an experienced employment law solicitor. The employer will encourage and it is standard practice for an employer to on the whole pay for this service in full or at least make a large contribution towards the legal costs for an employee to obtain independent legal advice. Paul Crowley & Co’s charges will be factored into this contribution, so there would be mostly no legal costs for the employee to pay.
The specialist lawyer’s at Paul Crowley & Co solicitors will check through the agreement on behalf of the employee and explain in detail the contents so that the employee fully understands if the agreement is right for them before signing.
When is a settlement agreement used?
Employers may wish to offer a Settlement Agreement when they want to terminate an employees contract on mutually agreed terms. Often a Settlement Agreement can be used at the time of redundancies, but they can also be used when businesses and employees decide on a parting of the ways.
The impact on business due to the coronavirus cannot be overstated, with many businesses forced to close, employers are finding it a struggle to retain their full complement of staff. With the government’s Furlough scheme set to end in March 2021, thousands of employees could well find themselves in receipt of a settlement agreement, as they are released from their place of work.
If you have been offered an employment settlement agreement, it is important you do not accept the employer’s first offer and instruct a solicitor from Paul Crowley & Co’s team of experts.
Not all settlement agreements involve the ending of a working relationship, often they are used to resolve a workplace dispute involving holiday pay, bonuses or sick pay.
Request a Settlement Agreement
It is also possible for an employee to request a settlement agreement from their employer. If an employee feels they are being unfairly managed out of the workplace, requesting a settlement agreement could be a more attractive offer to an employer as it avoids the time and expense of both parties having to deal with a constructive dismissal claim.
Can settlement agreements be negotiated?
Paul Crowley & Co are often asked by clients can a settlement agreement be negotiated? The answer is yes they can. Settlement agreements are voluntary and open for negotiation, an employee is not legally obliged to agree and sign a settlement agreement irrespective of what is being offered by their employer.
Paul Crowley and Co will reject the employers first offer and negotiate a series of counteroffers until a satisfactory agreement can be reached for the employee.
Our specialist team of settlement agreement solicitors, have a vast wealth of experience in successfully negotiating a diverse range of settlement agreements in favour of our clients, with our knowledge and expertise we are confident the final settlement agreement you sign, will reflect the best possible outcome for you.
For a free no obligation chat with a settlement agreement solicitor or to make an appointment call Paul Crowley & Co on 0151 264 7363 for email us [email protected]
At MyBump2Baby we are passionate about supporting families with legal advice. Unfortunately, unfair dismissal is something we are seeing a lot more of especially around mums and pregnant women. It is important to us that families are aware of the law and what unfair dismissal means.
Leslie is the head of public relations and marketing at Paul Crowley & Co.
At Paul Crowley & Co Solicitors, they pride themselves on being client-focused and strive to provide a straightforward, yet expert service. They are known for their friendly, approachable, and flexible approach, having served the local communities of Liverpool for over 25 years.