A Settlement Agreement, formally known as a compromise agreement, is an agreement made between an employee and employer which is legally binding and usually ends the employment relationship. They usually involve an employee agreeing to leave their position with a financial settlement in exchange for waiving their rights to bring an unfair dismissal claim against their former employer.
The conditions regulating settlement agreements are that:
A person is a 'relevant independent adviser' if they are:
The English legal system is designed to encourage early settlement, outside of the courtroom. Court proceedings are not only expensive for clients, but society as a whole, as it is expensive to try a case.
Therefore, it is a well-known principle of English law that communications between parties to a litigious dispute, for the purpose of settling it, are not generally admissible in evidence before the court as they are protected from disclosure by what is known as “without prejudice” privilege.
Settlement agreements are usually headed up “Without Prejudice”. This means that the employer and employee can discuss proposals freely in negotiations without worrying that what they say may be used in evidence against them.
If an employer or employee believes that the other party is in breach of the settlement agreement, they can bring a claim in the civil courts or the Employment Tribunal. However, they can only bring a claim in the Employment Tribunal if the settlement agreement was entered into before the end of employment.
To find out more about settlement agreements, please search for an expert employment solicitor on Solicitors Guru today.