Letter—advice to employee client regarding draft settlement agreement

The following Employment precedent provides comprehensive and up to date legal information covering:

  • Letter—advice to employee client regarding draft settlement agreement
  • 1 Definitions and interpretation
  • 2 Termination of employment
  • 3 Payments and compensation
  • 4 Expenses
  • 5 Pension
  • 6 Insurance benefits
  • 7 Tax indemnity
  • 8 Post-termination restrictions
  • 9 Confidential Information
  • More...

Letter—advice to employee client regarding draft settlement agreement

[insert name and address of client]

Private and confidential

Dear [insert name]

Draft settlement agreement—[name of employer]

I enclose a draft settlement agreement[ drafted by your employer’s solicitors] for your review. You will see that[ there are a number of options for you to consider and] there are some parts in square brackets. Please contact me when you have had an opportunity to review the draft so that we can finalise it. I set out below the matters you need to consider in relation to the various clauses.

The requirements for and effect of a settlement agreement

A settlement agreement[ (formerly known as a ‘compromise agreement’)] is a legally binding agreement, designed to enable an employee and their employer to settle any employment claims which arise under statute (eg a claim for unfair dismissal or unlawful discrimination) or under their contract (eg a claim for notice pay) and it is therefore particularly important that the agreement clearly identifies the legal claims to be settled: you will see that the ‘full and final settlement’ clause at clause 14 is very detailed for this reason. The requirements for a settlement agreement are set out in employment legislation and certain conditions must be met. The employee must take advice from an insured independent adviser (usually a solicitor[ but certain other advisers like myself are also covered])

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