Settlement agreement advice for employers

A settlement agreement is an agreement that brings to an end claims such as, claims for unfair dismissal or discrimination arising out of the employee’s employment or termination, other forms of simple agreements signed by the employer will not prevent the ex-employee from bringing a claim. Settlement agreements tend to be more extensive in terms of listing out possible claims.

It is important to note that settlement agreement should only be used in circumstances where there are potential claims to be resolved and where there is a genuine dispute in place between the parties. It is not sufficient enough to rely upon any written or oral agreement between you and the employee as this will not rule out the possibility of ex-employees bringing claims at a later stage. If executed properly however, the use of a settlement agreement is most useful as it will remove the risk entirely of any claims being brought at a later stage by an ex-employee.