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Settlement Agreements

What is a Settlement Agreement?
 

Settlement Agreements, formally known as Compromise Agreements, make it easier for employers to raise, in the right circumstances, the issue of someone leaving the organisation by having a “protected conversation” about their future.
 

The conversation(s) allow the parties to come to a financial agreement (severance package) in return for the employee agreeing not to pursue the matter further through the tribunals. A Settlement Agreement details this information and provides scope for other protections for both parties in line with ACAS Statutory Code of Practice.
 

While these are designed to be easy to set up, they are specialist documents and need to give the employer protection in a number of areas. There is certainly no standard template, as each individual’s circumstances are different, and the interests of the employer and employee must be protected.

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Benefits of using Settlement Agreements

 

  • Open and honest discussion about an employee's future – protected conversations

  • Confidentiality, restraint covenants and other negotiated terms

  • Protection from future tribunal action

  • Quick and clean break for employer and employee, especially if wanting to avoid problematic redundancies, ill-health dismissals etc.

  • An employer can replace the role

  • The employee has the reassurance of a positive reference

  • Fast, efficient and responsive handling

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Settlement Agreements are not appropriate in every circumstance, and BackupHR can advise when they can be used and where they should not be.​

The Settlement Agreement process can take a minimum of 3 weeks to complete once the formal written offer has been made to the employee, and in some cases, this may be longer.


What BackupHR will do as part of the Settlement Agreement Process:

 

  • Prepare the relevant documentation, including "Without Prejudice" letter and the Settlement Agreement draft

  • Calculate and agree the terms of the Settlement Agreement package in consultation with the client

  • Discuss with the client any other elements to the package, e.g. offering to pay an agreed amount for outplacement services for the employee to assist them in finding a new role quickly

  • Attend any necessary meetings with the employee by positioning with them the proposal and justifying the reasoning, and ensuring the employee understands the detail of the Settlement Agreement

  • Provide employee with a list of employment law solicitors within their area if they are unsure of who to use

  • Agree references and/or announcements with both the employee and client

  • All relevant liaisons with the client, the employee and their chosen Solicitor, to hopefully reach an authorised Settlement Agreement in a timely manner

 

The advantage to an employer is that we do all the preparation, delivery and facilitation of the entire process. All you have to do is agree with our recommendation.

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“We have been working with BackupHR for many years now, and their professionalism during Settlement Agreements is second to none.  A smooth, straightforward process leading to a satisfactory outcome for all.”

Call  us on 01480 677980 

or email info@backuphr.com

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