Settlement agreements are a common method used to terminate an employment relationship. They enable employers to pay an employee a termination payment in exchange for waiving their rights to bring a claim against them.
If you’ve been offered a settlement agreement, you may be wondering what the advantages and disadvantages to signing may be.
Advantages of a settlement agreement
- They can avoid the stress, cost and time of bringing tribunal claim by resolving disputes at an early stage
- They can provide a clean break from the employment relationship
- Terms are agreed by both parties
- The employee is provided with compensation for the termination of their employment
Disadvantages of a settlement agreement
- If an agreement cannot be reached it may jeopardise the employment relationship moving forward
- It may allow your employer to avoid dealing with any issues or grievances
- You are waiving your rights to bring a claim a claim against your employer
Things to consider
- Do you have any potential claims against your employer? This may include things like discrimination, whistleblowing or unfair dismissal.
- Would the value of bringing a claim outweigh what is being offered under the settlement agreement?
- How long will it take you to find new employment?
If you’ve been offered a settlement agreement, our Check My Settlement service provides a quick and easy way to get expert advice on your agreement.