Why Do I Need A Settlement Agreement?

Why Do I Need A Settlement AgreementThese days we are faced with ongoing economic problems and there seems to be a steady trend toward people facing redundancy, severance and loss of work.

If you find yourself in this position, it is an experience that can leave you feeling the financial pressures and it can cause a great deal of stress. Shock is not an uncommon reaction to the loss of a job, but before you become overwhelmed, you should consider your legal position.

There are a number of differences why you may be offered a Settlement Agreement. Commonly it is because of redundancies in the workplace. In these circumstances, there is a set formula which is used to calculate the amount which should be included in your severance package. Other reasons are more complex and one of our Solicitors will be able to tell you whether it is a fair agreement or not.

If you’ve been made redundant or let go from your job, then you need to consider getting expert advice and the sooner the better. We can help you with understanding what Settlement Agreements (formerly known as a Compromise Agreement) are all about before you are to sign one. It is effectively an agreement outlining any compensation or redundancy payout you’ll be receiving. It is also a binding agreement that will prevent you from taking further action following the termination of your employment, such as going to an employment tribunal. Given the nature of this document, it is important you get expert advice before you sign it so that you’re not legally bound by a situation that is less than satisfactory.

Why You Must Get Specialist Legal Help Before Accepting A Settlement Agreement

Making use of a legal Settlement Agreement (formerly known as a Compromise Agreement) during a redundancy has been used in severance situations in the past, and the major reason for using one is to clarify exactly what the employee would receive and to impose limitations on pursuing further legal action, as well as in situations where the employer may wish to limit the former employees options to work with competitors.

While many employers are using these agreements with the best of intentions, the fact that they prevent further action being taken makes it possible that other less scrupulous employers could use it to prevent employees from receiving their full entitlement.

A Settlement Agreement (formerly known as a Compromise Agreement) is an agreement that when used correctly prevents employees from taking action against an employer, however to be valid, the agreement must be in writing, it should agree only with the process of termination of employment and you must be given the opportunity to seek independent legal advice before signing the legal document.

Without this agreement in place, an employee who has been dismissed in a manner that doesn’t comply with the law will have the opportunity to have their case heard before the employment tribunal. If the case goes in the employees favour, that could mean they are compensated or even reinstated into their position.

By asking the employee to waive that right and sign the legal Settlement Agreement (formerly known as a Compromise Agreement), the employee cannot go to the tribunal, as they have signed an agreement that prevents them from doing so. Therefore, if you have been made redundant, you should ensure that you are completely satisfied with the ‘full package’ before you sign the agreement.

What About Paying Legal Costs?

Don’t worry. Virtually every Settlement Agreement (formerly known as a Compromise Agreement) provides that your employers pay your legal costs direct. So long as you eventually sign the Settlement Agreement (formerly known as a Compromise Agreement) then you don’t have to pay anything towards your legal costs.

Why use Seatons For Your Settlement Agreement?

Here at Seatons, we pride ourselves on being the Friendly Professionals. We provide a fast and friendly service with fair and reasonable fees. We offer a free, no obligation chat over the phone with one of our friendly advisers. Here we will listen to you, assess your case and tell you what you need to do next. Do not hesitate, call us today on 0800 310 11 12.

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