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

The Immigration, Nationality and Asylum (EU Exit) Regulations 2019

The Government has introduced before Parliament a Statutory Instrument (“SI”) with the aim of amending primary and secondary legislation to take into account the UK’s departure from the European Union whilst ensuring that immigration, nationality and asylum laws will continue to operate effectively until new legislation is approved by Parliament in due course. The Government…

Read More
Brexit Immigration Advice

British Citizens in Europe

British Citizens and EU Member State Immigration Policy  Preparing for a “no-deal” Brexit Members of Parliament (MPs) have now rejected the Withdrawal Agreement negotiated between the British Government and the European Union three times. The Prime Minister has entered into cross-party negotiations with the Labour opposition with a view to reaching a parliamentary consensus on a way…

Read More
Zero Hour Contracts

New Innovator and Start-Up Schemes

At the end of March 2019, the Government presented a Statement of Changes to the Immigration Rules (House of Commons paper 1919) which, inter alia, introduced two new routes of entry to the UK for foreign nationals wishing to establish new businesses in the UK: Start-Up and Innovator. Introduced under a new Appendix W to…

Read More