Disputes within the workplace are unfortunately very common. They can be stressful for both parties and difficult to resolve. You may find yourself in a position where you and your employer are not seeing eye to eye and are considering escalating the case to an Employment Tribunal. Or it is possible you have been asked by your employer to sign a ‘Settlement Agreement’ as an attempt to draw a line under the dispute. If this is the case, you’re probably wondering; what is a Settlement Agreement? Should I sign it? Would I be better off pursuing my claim through an Employment Tribunal.

It is a requirement that you seek legal advice prior to signing the agreement. This is so that you can seek clarity on what one actually is and that signing it is in your best interest. So, let’s get into it:

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐒𝐞𝐭𝐭𝐥𝐞𝐦𝐞𝐧𝐭 𝐨𝐫 𝐂𝐨𝐦𝐩𝐫𝐨𝐦𝐢𝐬𝐞 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭?

A Compromise Agreement – now more commonly known as a Settlement Agreement – is a legally binding contract entered by two parties in which one party agrees to not bring claims against the other in exchange for financial compensation. They are often used between employers and their employees to eliminate the risk of legal action being taken against a business.

Essentially, a Settlement Agreement is an employer’s promise to pay you a sum of money, stop treating you unlawfully in the workplace, or both.

𝐒𝐡𝐨𝐮𝐥𝐝 𝐈 𝐬𝐢𝐠𝐧 𝐚 𝐒𝐞𝐭𝐭𝐥𝐞𝐦𝐞𝐧𝐭 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭?

If you are in a position where you have been asked to sign a Settlement Agreement, it is likely that your employer has been treating you unlawfully or unfairly in the workplace. Whatever the scenario, your employer is taking some responsibility by drafting a Settlement Agreement to resolve the issue.

That said, it doesn’t mean that it will be in your best interest to sign the Settlement Agreement. It may well be. However, it could be more beneficial to take the case to an Employment Tribunal.

This is where we come in. Our team of Specialist Employment Solicitors can review your circumstances and advise you on how to receive the best outcome. Each case is unique and there is no one size fits all when it comes to advising clients on which route to take.

What are the benefits of a Settlement Agreement?

The main benefit of signing a Settlement Agreement is the certainty of a clean break between an employee and their employer. As an employee, you will have the security of knowing that upon your termination, you will receive a financial sum and the guarantee of a reference moving forward. The employee is also secure in the knowledge that no further claims can be brought against them by the employee.

Where can I get advice?

If you are trying to resolve a workplace dispute and have been asked to sign a Settlement Agreement, contact our team for a personalised, no-obligation chat.

You can use our contact form or call us directly on 0161 402 0213.