If a relationship between employee and employer breaks down, one solution is to enter into a 'Settlement Agreement'. This is a legally binding agreement that allows the employee to gain an agreed tax free lump sum whilst in return agreeing not to proceed with their case to an Employment Tribunal or Civil Court.
The employer's solicitor would traditionally draft the Settlement Agreement. This would be in writing and would specify the dispute being settled, and state the conditions to be complied with. The employee must seek legal advice on the Settlement Agreement from a solicitor and usually the cost of this would be paid by the employer.
For more information contact our office and speak with a member of our Employment Law team on 0161 797 9222.