FAQs

1. What is a Settlement Agreement?

   In a nutshell, a Settlement Agreement is a legal document which waives an employee’s rights against their employer (such as to bring claims for unfair dismissal, discrimination etc), usually in return for an agreed severance package.

2. What is the benefit of a Settlement Agreement for my business?

   The commercial rationale for the employer is that the cost of this process is often significantly lower than would be incurred if the employer had to defend an Employment Tribunal claim.

3. What is a protected conversation?

   A protected conversation is an ‘off the record’ or ‘without prejudice’ conversation which employers are legally entitled to hold with employees as a means to resolve issues between them without the need for a claim. If held appropriately, such a conversation generally cannot later be relied upon or referred to in an unfair dismissal claim in the event that it does not lead to a resolution.

4. Does the employee need their own solicitor before signing a Settlement Agreement?

   A Settlement Agreement is not binding unless a relevant adviser has explained the terms and the effect of the Agreement to the employee, as he or she is giving up legal rights surrounding their employment and its termination. A relevant adviser can include a solicitor or a trade union representative.