Settlement Agreement Solicitor In Coleshill

What is a Settlement Agreement?

A Settlement Agreement is a legally binding contract between an employer and an employee. It states that the parties will terminate their employment relationship, with the employee relinquishing their right to make a claim in the Employment Tribunal in exchange for a ‘settlement’. The settlement can consist of financial and non-financial benefits.

What are the Legal Requirements of a Settlement Agreement?

To be legally valid, a Settlement Agreement must:

• Be in writing.
• Relate to a ‘particular complaint’ or ‘particular proceedings’.
• State that all the legal requirements have been satisfied.

In addition, the Settlement Agreement must confirm that you have received independent legal advice from an advisor named in the agreement.

If any of the above stipulations are not met, the Settlement Agreement will be invalid. In England and Wales, it is customary that the employer will pay for you to receive independent legal advice. Any proposal of this sort should be set out in the Settlement Agreement offer.

When instructing our Employment Law Solicitors, you can trust that we will negotiate the best deal possible. Furthermore, we will carefully analyse the agreement and make sure it is fair – for example, if you are bound by a confidentiality clause (which you undoubtedly will be), your employer must also be prevented from disclosing the reasons behind the need for the Settlement Agreement and the terms of the contract.

Can I Ask for a Settlement Agreement?

An employer or an employee can ask for a Settlement Agreement. If you believe you have a claim for discrimination, unfair dismissal, or your relationship with your employer has irretrievably broken down, you can suggest that Settlement Agreement discussions begin. A Settlement Agreement is advantageous to your employer as it can include a confidentiality clause to prevent you from discussing the circumstances that led to the agreement, thereby protecting their commercial reputation. Furthermore, your employer will not have to worry about you bringing a future Employment Tribunal claim.

Before you suggest a Settlement Agreement to your employer, talk to our Solicitors to ensure that this is the best solution for your employment dispute.

Do I Pay Tax on the Money I Receive from a Settlement Agreement?

Settlement Agreement payments are made up of two elements:

• Contractual payments
• Compensation payments

Contractual payments consist of monies you are due under the terms of your employment contract such as holiday pay. These will be subject to income tax and National Insurance (NI) payments.

The compensatory payment, also referred to as the ex-gratia payment, is the compensation paid by the employer to cover the loss of your job. The first £30,000 of the compensation payment is tax and NI free.

What are the Advantages of a Settlement Agreement?

Entering into a Settlement Agreement with your employer has many benefits, including:

• You will receive compensation without having to bring an expensive, stressful claim in the Employment Tribunal.
• You can negotiate a positive reference.
• The compensation payment is likely to be higher than what you would receive from an Employment Tribunal claim.
• You can ask for non-financial benefits such as paid-for access to a career coach or the right to keep your company laptop.

I am not Based in Nuneaton. Can You Still Represent Me?

Our employment law team regularly supports clients across the nation, not only those who are based in Nuneaton. The distance between you and our office will have no effect on our ability to provide highly effective advice or representation.