Settlement agreements

Topic Index
Overview
Conditions for a valid settlement agreement
Common terms in settlement agreements
Claims that can be waived in a settlement agreement
ACAS guidance on settlement agreements
Resources - settlement agreements

Overview

 

  • A settlement agreement is an agreement between an employee and his or her employer whereby the employer agrees to pay the employee a sum of money to settle claims which arise on termination of employment. The employee agrees in exchange not to pursue a particular claim or claims.
  • It is not necessary for tribunal proceedings to have been started or for a grievance to have been raised for a settlement agreement to be valid.
  • Employers also can enter into off the record ‘protected conversations’ with a view to agreeing the exit of employees – even if there is no existing dispute between the parties. As long as certain conditions are met, the fact or content of such conversations cannot be used in subsequent employment tribunal proceedings for unfair dismissal.  

 

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