Issues to consider when drafting a settlement
agreement - checklist (employer)

Issues that the employer and its advisers should bear in mind when negotiating a settlement

    Employment legislation usually contains 'contracting-out provisions', relating to most employment tribunal claims, that prevent parties from reaching a simple agreement to settle. They are designed to stop claimants signing away their rights without adequate safeguards having been observed.

    Those provisions allow claims to be settled validly using a settlement agreement (formerly called a compromise agreement) that complies with statutory rules. Settlement agreements do not require Acas' involvement, are free-standing and enforceable in the courts, and are particularly useful where proceedings have not yet been issued or no dispute has yet arisen.

    To help employers and their advisers to draft, negotiate and implement a suitable and effective settlement agreement, we have created a free checklist that covers preparation, negotiation, listing the claims to be settled, making the agreement effective, tax, garden leave, payments and other remuneration (plus repayments and set-off), pension, company director issues, post-termination restrictions, confidentiality and secrecy, references, legal advice and personal injury claims.

    This checklist is part of our wide array of settlement materials, comprising 18 practice notes, precedents (31 in all) for long and short form settlement agreements, multiple additional clauses and accompanying draft letters, and a selection of further checklists and Q&A documents.

    Lexis®PSL Employment fully equips you with practical, up-to-date guidance and materials to help maximise your productivity and ensure you always give the best advice and service to your clients.

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