Expert Advice Guide on Employment Settlement Agreement

Every company that requires the services of individuals usually sets certain rules and regulations that govern the smooth running of the company. They also put in place severance terms that are specifically meant for the employee in case of termination. One of such is a settlement agreement, which we’ll discuss in this article. This article aims to equip you with the necessary information you need to know regarding this topic.

What a Settlement Agreement Is?

This is a legally enforceable contract between the employer and an employee. It is a way of providing severance money in exchange for your employee’s inability to chase any assertions in court. You can click https://www.indeed.com/ to find out more about severance pay. This is also used to arrive at a conclusion to issues in a workplace that does not lead to the termination of the employment relationship.

It is usually a prolonged document that provides security for your company regarding a series of scenarios that may occur at the workplace. A settlement agreement is beneficial in the sense that it helps you curb the circumstances that may lead to the termination of your employee contract without blowing things out of proportion. For an employer, this document can help you put your mind at ease regarding employee contract termination.

When Should a Settlement Agreement be Issued to the Employee?

A severance term is not being offered without any reason for it. Therefore, you need to know when to give your employee this agreement as an employer. So, when should an employer give a settlement contract to his staff member?

A settlement agreement is usually given when an employee’s contract is about to be terminated. When an employee’s services are no longer needed, this is a way of paying them off for their years of service and all they might have contributed towards the growth and development of the company. The employers give it to reduce any lengthy procedure they might have to go through due to the termination.

If the staff member accepts the agreement, it brings their employment to a fast conclusion. This agreement is put together by an employment law solicitor. You can visit Settlement Agreement Advice Ltd to learn about the process of hiring an employment law solicitor. This is important because the solicitor is best suited to draw up the terms that will be beneficial to both parties.

When and Why Should a Settlement Contract be Used?

This agreement may be issued when there is a mutually agreed termination term you have with your staff members. It will provide a clean break for you as an employer, thereby preventing the employee from charging you to court for extra money. Also, it can be given in cases where you would want to avoid a long process before terminating the employment.

However, it is advisable to give your staff notice beforehand. For instance, you can place them on employee’s appraisal or make them understand that their job is at risk. This will reduce any kind of issue or dispute the employee may want to put up.

Furthermore, when your employee expresses grievances towards you or the company, this could be that your confidence and trust have completely been let down. This is a sign and a reason why you must offer this settlement on favorable terms. It could be presented in a letter form so as not to expose your organization to risk.

Content of a Settlement Agreement

Although you’ll leave the drafting of the terms of the agreement to the solicitor, it’s important to have an idea of what the contract will contain. Usually, the terms are tailored to match the particular case at hand. Before you present it to your employee, you can tell the solicitor to include some other details. Apart from such personal additions, most contracts will contain the following:

1. Date of termination of the employment.
2. Bonus, outstanding salary, commission, and pay for the holiday based on the employer.
3. The amount of the severance payment extended to the member of staff.
4. The basis and the agreement terms with a confidentiality clause that protects the reason for severing the employment.
5. A clause that maintains a respectful tone that hinders the employer and the employee from using negative language on each other.
6. A commitment that mandates the boss to settle the member of staff’s legal fee to a particular amount.
7. A clause that states that the staff member is concurring to waive any claim that may arise from their employment contract and termination.
8. Acknowledging that the employee has a particular right to reference even after termination.
9. A clause that confirms that the employee has the right to self-supporting legal advice.

These are the basic contents of a settlement contract. But as we said earlier, it can be adjusted based on the specific needs of the employer. A legal adviser must sign this agreement and must be written.

Conclusion

A settlement contract is something every employer needs to make readily available for their employees. Also, it is good for those who may want to tarnish the company’s image even after their employment has been terminated. This article has revealed all the important details of the above agreement to enable both employer and employee to have a basic knowledge of what to expect when the need arises.