Avoiding Employment Tribunals with a Settlement Agreement

Employment disputes can involve complicated issues which can distract you from your daily work and also reflect badly on your business. If you suspect that an employee may bring a claim against you then acting fast by offering them a Settlement Agreement could provide you with a more desirable outcome.

If an employee is considering bringing a claim against you then it is important that you consider your options. It might be that the employee has no basis for their claims but, even if this is the case, the time that is involved defending your business could be better spent elsewhere and defending your corner may leave you out of pocket and distracted from more important tasks.

A Settlement Agreement can provide you with a less costly and a less time intensive way of bringing the dispute to a close. It can be used to either bring an existing claim to a close or to prevent one from being brought against you in the first place.

This usually involves the employer paying what is called a termination payment to the employee in exchange for them dropping their claim or deciding not to bring one.

The terms of a Settlement Agreement can be put together in a way that is mutually beneficial to both parties too. For example, the employee is provided with a termination payment, unpaid salary, holiday pay and commission, while the employee agrees not to criticise their former employer or to pursue claims, therefore protecting the reputation of their business.

Restrictive covenants might also be added to the terms of the Settlement Agreement in exchange for payment which may include things like limiting contact with former clients, protecting confidential information and prohibiting the solicitation of former colleagues.

Settlement Agreements can be used to prevent a number of different types of claims including unfair dismissal, pregnancy or maternity related claims and discrimination. However, some scenarios, such as an employee claiming for personal injury might not be eligible to be settled via a Settlement Agreement.

To find out more about Settlement Agreements click here or to arrange a complimentary telephone consultation, please contact us online or call 020 7611 4848.