Settlement Agreements are an increasingly popular tool for resolving difficulties that can and do arise in the employment relationship.
How can Settlement Agreements be used to resolve disputes?
Where there is disagreement between an employer and employee, a Settlement Agreement can be used to bring the issue to an end to each party’s mutual satisfaction.
Most commonly, they are used when the relationship between employer and employee is not capable of being sustained, and a clean break is required.
The content of a Settlement Agreement will tend to reflect the result of negotiations between employer and employee, so it is unwise to generalise on what the detail of every Settlement Agreement will be. However, a Settlement Agreement that has been properly negotiated and accurately drafted will, in most cases, provide for the following:
- An employee agreeing to waive any right that they have to raise legal proceedings in the courts or employment tribunal against their employer; and,
- An employer agreeing to provide the employee with some level of compensation as part of the agreement.
When should Settlement Agreements be raised in a discussion?
The timing of the use of a Settlement Agreement is a matter of judgement. It is generally advisable that both employer and employee use every option open to them, through negotiation and discussion, to attempt to resolve their difficulties.
In general, it is advisable that a Settlement Agreement forms part of a wider discussion and negotiation between employer and employee on the condition of the employment relationship. In severe cases it is not uncommon, where both parties believe there are sufficient grounds to warrant a termination of the employment relationship, for a Settlement Agreement to feature more prominently in negotiations.
Both parties are free to suggest the use of a Settlement Agreement but there must be no reason for suspicion that: an employee is attempting to ‘cheat’ their employer by attempting to hold them to ransom; or that an employer is attempting to discriminate against a particular employee.
What are the legalities of using Settlement Agreements?
It cannot be overstated that Settlement Agreements are a kind of contract between employer and employee. As a result, it is vital that certain standards are observed in their creation and use:
- A Settlement Agreement between employer and employee must be the result of both parties having received independent legal advice, put in writing and signed. This is important for both parties: an employer needs to be clear on the legal consequences of agreeing to the terms of the agreement; so too must employees, who will forego any future opportunity to raise legal action against their employer.
- Both parties must keep in mind that a Settlement Agreement, as a kind of contract, is the result of negotiations between them. As a result, both parties would be wise to keep this fact in mind in their discussions with one another, so as to contribute to more constructive discussion and the efficient resolution of their disagreement.
Settlement Agreement Lawyers Dublin, Ireland - Get expert advice today
We are very proud of our history of working in partnership with employers to resolve their differences with employees through the use of Settlement Agreements that reflect their specific circumstances. As well as specialist employment law negotiators, our lawyers are experts in drafting these complex legal contracts, and will ensure that they are sufficiently clear and precise to record the agreement between both parties. We can help advise on a range of employment law issues including discrimination and equality issues and redundancy/dismissal.
Settlement Agreements are complex legal contracts between employer and employee that must be negotiated and created with the assistance of specialist employment lawyers. If you require legal advice on any of the above services or any other legal matter, get in touch on touch +353 1 663 2000 to speak with one of our experienced solicitors.