Settlement agreements, previously known as compromise agreements, are legally binding contracts that waive an employee’s right to make a claim covered by the agreement to an employment tribunal or court. They invariably involve a payment to the employee in full and final settlement and are used extensively for senior level exits from a business.

AB Commercial HR Solutions can support with all aspects of settlement agreements

  • Drafting settlement agreements
  • Brokering financial settlement and facilitating discussions between the parties
  • Agreeing acceptable “forms of words” to cover employee references and to announce departure from the business
  • Negotiating terms between the parties and acting as a “go between”
  • Advising on how to protect the business from future risk.

Settlement agreements protect the employer and employee, who will always need to seek legal advice on the terms of the agreement. In some situations where the exit is acrimonious, it is sensible for the process to be managed independently through a third party.