What are the usual payments under a settlement?
A settlement agreement must provide for:
- the payment of salary and benefits up to termination date
- payment in lieu of notice (if the employee is not working their notice)
- payment for accrued but untaken holidays
- payment of approved outstanding expenses
- any SSP or SMP due
- statutory redundancy payment, and any contractual payments
- any compensation payment
Can a settlement agreement include a provision that the employee cannot be reemployed by the employer?
Yes, it can, but is rarely used because in some cases the trust has broken down and neither party will wish to work with the other. In some cases, this can be used, but paired with a requirement to repay some or all of the compensation received in the settlement agreement.
Can a settlement agreement include a provision that the employee cannot work in that profession or industry anymore or for a set time?
No, it is a basic legal right that a person is free to follow their chosen trade or profession.
Can a settlement agreement include a provision that the employee cannot work with the company’s customers or suppliers?
Yes, this is a common restriction in some industries, but will usually be limited to a geographical area or for a limited time. The restricted area or amount of time must be reasonable. If this is an issue that concerns you, you may need to speak to our employment law team.
Can a settlement agreement include a provision that the employee must get legal advice before signing?
Yes, the employee must be aware of their legal rights and options before signing a settlement agreement, and it provides protection for the employer also. It is unwise to accept a signed agreement from an employee without a legal adviser’s certificate. Employers usually pay the legal fees to encourage and enable the employee to get this done.
Can a settlement agreement be used to settle a dispute at work?
Yes, a settlement agreement can be proposed by either party to settle specific proceedings and are now more commonly used to end employment whether amicably or otherwise.
Does a settlement agreement need to include an agreed reference?
If there is no format for the reference that the employee will get, it is in their interests to request one. In most cases the reference provided is the basic version, but in some cases a more detailed reference can be agreed.
Our lawyers are also available to provide expert advice and assistance on these and other subject areas that we handle, and can be contacted on 01279 598 008 / 07958 571 391, or on info@andersonbrownesolicitors.co.uk.
EmploymentPublished: December 2021 | Author: Daniel Moore