What are Settlement Agreements
A Settlement Agreement (formally known as a Compromise Agreement) is a legally binding contract between you and your employer. Usually, in a Settlement Agreement the employer will offer compensation to an employee in exchange for that employee giving up their employment and agreeing not to bring any claims against the employer. There can be a number of variations and sometimes an employee may agree to take a different job or move to a different location; however there will be a bargain or exchange between the Employer and Employee in the Settlement Agreement.
Whilst a Settlement Agreement may appear to be a normal contract, due to the inequality of the relationship between an employer and an employee, there are a number of additional legal requirements which must be observed before it can become binding and be enforced (if necessary) by the parties signing it. One of those requirements is that the employee must receive independent legal advice before signing the Settlement Agreement. Often the solicitor will have to sign a declaration with the Settlement Agreement confirming they have given such advice and that the Employee fully understands the consequences of signing.
It is likely that if you sign a Settlement Agreement you will lose your job and/or be losing your right to take action against your employer. In addition, the Settlement Agreement may contain clauses which prevent you from working in a particular area or in a particular industry. The consequences of signing a Settlement Agreement are potentially life changing. Whilst this may be a positive step for you and you may be happy to sign, you must make sure you understand the terms of the Settlement Agreement. In any event, you are obliged to take legal advice before you sign the Settlement Agreement and you should make sure you take full advantage of that advice and require your solicitor to go through the contract will you thoroughly.
If you wish to enquire about your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.