Settlement Agreements – benefit of using one solicitor to act for your employees

When a business needs to make redundancies, it may want to consider offering enhanced terms to those employees via a Settlement Agreement. This controls the prospect of any future claims and gives certainty to the terms as well as being legally binding between the employer and the employee if drafted correctly. It is usually entered into shortly before or after the termination of the employee’s contract of employment.

The benefit of using this type of agreement is that it provides a clean break with the employee agreeing to waive their rights to make a claim, instead receiving an agreed amount of compensation. It can also include agreed references, extra protection on confidentiality and warranties from the employee.

Employees must obtain independent legal advice before entering into a Settlement Agreement if it is to be binding, which the employer usually contributes a fixed sum towards the cost of. However, it can be a more cost effective and faster process for all employees to be offered one independent legal advisor to do this work.

Where one firm is appointed to sign off multiple Settlement Agreements it will be a faster and more efficient service, but employees do still have the right to choose their own solicitor if they decide to do so.

I recently acted for a group of employees who were unfortunately made redundant and were offered a Settlement Agreement by their employer. After speaking to each employee individually and making sure they understood the terms of the agreement, they were all signed, and the process concluded swiftly. This helped to reduce costs for the employer and allowed for the fast conclusion of the matter for all parties, allowing employees to seek alternative employment opportunities and the employer to progress with their future plans for the business.

If you would like to discuss drafting a Settlement Agreement or for legal advice on offering Settlement Agreement assistance to your employees, please get in touch today.

Amanda Finn is a Partner at Gullands Solicitors and can be contacted on T: 01622 689700