SETTLEMENT AGREEMENTS The more senior an employee, the more common it is for an employer not to follow any sort of formal procedure at all - see senior executive severance arrangements and dismissals. However, employees at any level can be asked by their employer to sign a settlement agreement. The effect of the settlement agreement is that you are signing away your right to make a claim against your employer following the termination of your employment in return, usually, for a financial payment. Agreed references and departure statements are also commonly included. In some cases these agreements are used when employment continues but your terms and conditions of employment are being amended. Your employer will require you to take independent legal advice on the terms of the settlement agreement, and usually they pay or contribute to your legal fees. It is more common than you think to be offered a settlement agreement or find yourself in a situation where you require to negotiate a departure from your work in difficult circumstances. In this situation your employer may instigate "pre-termination negotiations" with a view to agreeing exit terms. Subject to complying with certain requirements, these negotiations are inadmissible in any future Employment Tribunal claim. For more detailed information please see settlement agreements. It is important to seek advice on the terms of the settlement you are being offered to ensure you are being adequately compensated.
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