A settlement agreement is a legally binding contract between an employee and an employer which takes away the employee’s rights to make a claim in court or tribunal. In exchange the employer promises various payments, usually beyond what the employee is normally entitled. Settlement agreements can be used to end an employment relationship; settle disputes whist still employed or to settle claims already issued at the Employment Tribunal.
In order for a settlement agreement to be legally binding it must be in writing, it must relate to a particular issue/complaint/dispute and you must receive advice from a suitably qualified lawyer. Although most solicitors can advise on settlement agreements only a solicitor with expertise in employment law can give expert advice on the full effect and meaning of the typical terms found in a settlement agreement. On some occasions you may want a solicitor to negotiate the terms of your settlement agreement to make sure it is right for you and your situation.