A settlement agreement is a signed arrangement between an employee and employer that waives any legal claims or liable clauses. This agreement settles any claims that an employee can make against the employer or business as they agree to end the employment contract between the two parties. Typically, this is used in conjunction with end of employment decisions. There are instances where an employee and employer continue to work with each other but use a settlement agreement to compensate or settle a dispute or disagreement between each other.
Should a situation arise where a lengthy disciplinary procedure arise where both parties no longer wish to work with each other, sometimes a settlement agreement is used by way of cutting short the lengthy proceedings where both parties agree to part ways leaving no liability or claims against each other, often when this is the case, there is a settlement and financial arrangement or offer made.
OptHR can help you through the entire process, from helping you identify the opportunity to use a settlement agreement to settle disputes and claims amicably, through to drafting settlement agreements and negotiating with the other party. We can offer HR advice or support to you on how to calculate the value of a settlement by reviewing various parameters of the employee such as length of employment, circumstances and dispute type.
Our team are able to help you navigate the process and provide you with detailed forms, policies and steps to take when going down this route. Your agreement will need to meet a number of statutory requirements whilst also complying within the Employments Rights Act 1996
If the agreement is not adequately laid out or the claims are not settled properly, this could leave the business open to a claim against them, therefor its essential that you get this right first time with the right planning and strategy. We are here to assist you with your settlement agreements and you can trust in OptHR to guide your business in the right direction.
if you would like to know more about settlement agreements and how your business can use these – get in touch where we can offer HR advice.
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