Settlement Agreements

By law an employee cannot waive statutory claims unless he enters into a settlement agreement or binding ACAS agreement. The latter is therefore commonly used once proceedings have been issued and the former is adopted prior to proceedings having been issued.

The employee must, as a matter of law, receive independent legal advice on the settlement agreement to secure a binding waiver of all the employee’s statutory and contractual claims.

The reported cases show us that employees have been allowed to proceed with claims where the settlement agreement was not properly drafted and executed.

All employers seeking to enter into without prejudice discussions must do so with caution. Simply labelling correspondence or discussions ‘without prejudice’ shall not guarantee that a Court or Employment Tribunal will be prohibited from hearing evidence of those discussions or reviewing the correspondence. The concept of a ‘protected conversation’ has now been introduced which can offer employers additional protection when approaching an employee in relation to an exit package.

We have the expertise to advise and assist your business in relation to employment disputes, conducting settlement negotiations and drafting settlement agreements.

Subscribe for updates

We send out regular e-mail updates on Employment law changes for HR professionals. Register now to stay up to date.