Employees often offer settlement agreements when they want to put an end to an employment in a move to ensure that there would not arise any need to take the employer to court for claims to more money.
Specifically, in a scenario where an employee already has brought claims about discrimination, work-related grievances or claims for unfair dismissal in which he/she has clear evidences to support his claim. The employer, in this case, may want to prevent a claim for constructive dismissal and/or discrimination by drawing up a settlement agreement which would likely be favourable to the employee. Such settlements may not showcase the full value of the claims and issues, but the tendencies and possibilities of an unsuccessful tribunal action often convinces the employee to enter into the settlement agreement.
Where an employer, on the other hand, has reasonable grounds to assert that an employee has been of an unprofessional character and conduct or has been the subject of sub-par and poor performances; such employer may offer the settlement agreement as an alternative to towing the common disciplinary route to put an end to the employment relationship. This may include a general reference to enable the departing employee secure a new job appointment elsewhere without the dent or stain of his poor performances to go with it
An employer may also resort to a settlement agreement where a position of an employee has become redundant and the employer desires to bring an end to the employment relationship but does not want to undergo the usual long, extended processes usually involved in the determination of employment agreements like consultation processes, performance reviews. embarking on a long and hard disciplinary procedure which would often consume a lot of time and funds and could create possible complications
Furthermore, a settlement agreement may not also connote that there is a desire to bring an end to an employment. In other words, it may be executed without the employer necessarily intending to terminate the employment, it may merely be employed to settle arising technical issues and disputes between the employer and the employee where the latter agrees to forgo the claims he/she may have against the company for the settlement offer proffered
In a more solemn and unfortunate scenario, an employee may have been diagnosed with a life-threatening or incapacitating ailment which is sure to hamper his working abilities for his post, such person may be offered a settlement agreement in which he leaves the post and is provided with his necessary entitlements and other other ex-gratia payments with which the departing, ailing employee may not be entitled to as settlement
You can call us on 0207 183 0084 or email us on employment @olaleslie.com for any queries about Settlement or Compromise Agreements . We are always happy to assist and can usually arrange appointments for Independent Legal Advice at short notice