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

Numbers Engaged in Early Conciliation Continue to Rise

Numbers Engaged in Early Conciliation Continue to Rise

ACAS, the statutory conciliation service, has reported a 21% increase in the number of Early Conciliation notifications it received in 2018/19. Making an Early Conciliation notification is the first step a potential claimant must take if they intend on issuing certain claims against their employer. Once the Early Conciliation notification has been made, ACAS will…

Read More

MyGMPD

We are delighted to partner with MyGMPD as Subject Matter Experts to provide professional development training and content to Global Mobility specialists across a range of industries and companies. Launched in 2019, MyGMPD aims to provide a professional development programme to improve skills and specialist Global Mobility knowledge leading to accreditation and recognition. Our specialist…

Read More

BritishAmerican Business Publication Launch

As part of our close collaboration with BritishAmerican Business (BAB) we have been working with them this Summer on their Trade and Investment Guide to the UK. With so much political uncertainty in the UK leading up to the 31st October Brexit deadline and the potential for a future trade deal with the US under…

Read More