Open Navigation

Severance Agreements

Getting the ending right protects both parties.

A well drafted Settlement Agreement does more than obtain a waiver of employee claims in return for a financial payment.

In circumstances where there is a potential dispute brewing, or where an employee has raised the possibility of Employment Tribunal claims.

An employer may decide to enter into a severance agreement to record the terms of the employee’s departure, and document the waiver of claims by the employee in return for a severance payment being made by the employer.

However, many employers do not realise that unless the severance agreement complies with specific statutory requirements, it will not be an effective waiver of statutory claims (such as those for unfair Dismissal or discrimination) and will in fact, only waive the employee’s common law claims.

In order for a severance agreement to validly waive all of the employee’s claims, certain statutory conditions must be met. These conditions are as follows:

  • The agreement must be in writing;
  • The agreement must relate to a particular complaint or particular proceedings;
  • The employee must have received independent legal advice on the agreement and in particular on its effect on their ability to pursue the statutory rights in question;
  • The adviser must be identified in the agreement;
  • The adviser must have insurance in relation to the advice; and
  • The agreement must state that the conditions regulating settlement agreements in the relevant legislation have been met.

News

COVID-19 Legal Right to Work Check Concessions End on 20 June 2021

The UK Home Office has provided employers with latitude in meeting Legal Right to Work (LRTW) Compliance requirements during the COVID-19 pandemic through a series of concessions. One such concession enables employers to conduct right to work checks remotely, thus not requiring employees or HR personnel to be physically present in an office for the…

Read More
Passport

Is it legal to use coronavirus passports in the UK?

The vaccination programme has been very successful, with over 30 million adults receiving their first inoculations and over 4 million, their second. Until the last few months, the UK government said that requiring coronavirus passports in order to access certain services and foreign travel was discriminatory and therefore would not be adopted.  This view now…

Read More
Immigration Advice based upon the MAC Report

Migration Advisory Committee: Call for Evidence

The Migration Advisory Committee (MAC) is a body of independent expert economists retained by Government to advise on immigration policy reform in the context of prevailing labour market and UK business needs. The MAC undertakes extensive labour market and stakeholder research before publishing recommendations for change following commissions from the Home Office. A MAC review…

Read More