Settlement (formerly known as Compromise) Agreements

If an employer is going to give a departing employee a severance package they are advised to ask the employee to enter into a settlement agreement so as to ensure that they cannot bring a claim to the Employment Tribunal. Even if the employee agrees in writing not to take a claim following receipt of a termination payment, this will not prevent them from pursuing a claim in the Employment Tribunal unless there is a settlement agreement in place which meets certain statutory requirements. The employment team at Rix & Kay can assist you in drafting a settlement agreement and give you advice on whether you should consider inserting matters as new restrictive covenants in the agreement so as to protect your business from your departing employee.