Settlement Agreement Lawyers Glasgow, Scotland

Settlement Agreements can often be an attractive means of resolving a dispute so as to avoid claims being raised before an Employment Tribunal. They allow the parties to arrive at a resolution at an early stage so as to avoid the time, inconvenience and cost that would otherwise be incurred should an employee’s claim proceed to the Employment Tribunal. They also provide parties with a better opportunity to keep control of a situation, through negotiation of a compromised settlement, rather than run the risk of being unsuccessful at tribunal.

In signing a Settlement Agreement, an employee is agreeing to waive their right to enforce a particular legal right and to pursue a claim against their employer. In return, the employer will provide the employee with some form of consideration (usually although not always financial compensation) to compensate them for waiving that right.

There are certain requirements that a Settlement Agreement must fulfil to be valid and legally binding:

• It must be in writing;
• It must relate to a particular employment complaint (or complaints) or employment proceedings;
• The employee must have received independent legal advice (usually from a solicitor) as to the effect of his acceptance of the agreement on his ability to pursue the rights being waived;
• The agreement must identify the relevant laws governing Settlement Agreements and state that their requirements have been complied with; and
• The parties must sign the Settlement Agreement.

So long as these requirements are met, there will be a legally binding agreement. However, parties are free to include such other terms and conditions as they agree between them. Common examples of other matters that are regulated in a Settlement Agreement include:

• Confidentiality;
• Post termination restrictions;
• What contribution (if any) the employer will make towards the employee’s legal fees in taking the required legal advice;
• The provision of a reference; and
• Tax issues.

However, there are no restrictions on what relevant issues can be covered off.

A Settlement Agreement allows an employee to receive compensation in respect of some dispute or complaint which may have arisen during the course of employment. This allows the employee to avoid bringing costly and time consuming employment tribunal claims as well avoiding the risk that a tribunal may not find in the employee’s favour. Where the employee’s employment has terminated, resolving matters in this way can also ensure that the employee receives some form of income when they are out of work without receiving a regular wage.

Use of Settlement Agreements can be commercially advantageous, allowing an employer to avoid the costs and potentially negative publicity associated with defending any employment claims brought by a disgruntled employee. The effect of a valid and legally binding Settlement Agreement precludes an employment tribunal hearing any claims later brought by that employee. Use of a Settlement Agreement allows an employer to settle any such claims and employee has at that time, but it is also routine for Settlement Agreements to also prevent an employee bringing certain other types of

Cumulatively, a Settlement Agreement often represents a clean break for both employer and employee. For an employer, knowing that a potential legal challenge is avoided can help free up time and resources for actually running their business and serving your customers or clients.