What happens if you are presented with a Settlement Agreement?

Posted by Janet @ Alba on February 13th, 2024

DO NOT SIGN IT!

The first thing you must do is read it and consider the implications.

What is a settlement agreement?

A settlement agreement is a legally binding contract between an employer and an employee. They can be used in several situations but the most common reason is when an employer wishes to terminate your contract of employment. They can be used to settle a grievance or dispute at work or simply when the employer decides the working relationship should come to an end.

For this reason, it is important that as the employee, you don't just accept their terms without understanding them fully. It is likely that the terms will favour the employer and not you.

Once you sign this document, it usually means, you will be giving up the right to any future legal claims against this employer.

What an employee should consider when they are presented with a settlement agreement

1. Get legal advice

We highly recommend getting a specialist employment law solicitor to review your settlement agreement. This ensures that you fully understand the implications of the agreement and the rights you may be waiving.

Settlement agreements often include confidentiality clauses which prevent you discussing the details of the agreement. Your lawyer will explain the scope and limitations of this clause.

It is also possible that your employer will add a clause restricting you from working for competitors or soliciting clients. This is important to negiotate if you are intending to continue to work in the same industry in the same location.

2. Negotiate

You have the right to negotiate the terms of the Settlement Agreement. This includes the amount of compensation, the wording of the agreement, and any other terms that may be negotiable. A good solicitor will help you negotiate terms that are beneficial to you and will be agreed by the employer.

Conclusion

Facing a Settlement Agreement requires a careful and informed approach. Understanding your rights, the agreement terms, and seeking independent legal advice are fundamental steps in making decisions aligned with your best interests. If you are based in Scotland, ELP Arbuthnott McClanachan in Edinburgh have specialist employment lawyers who can provide you with expert guidance and legal advice. Their website also provides more information about settlement agreements for employees.

Like it? Share it!


Janet @ Alba

About the Author

Janet @ Alba
Joined: August 28th, 2018
Articles Posted: 21

More by this author