Settlement Agreements

What Are The Standard Terms Within Settlement Agreements?

The standard terms within settlement agreements, are as follows:-

• A lump sum payment to be made to the employee as compensation for loss of office
• The Employee agrees not to pursue a claim/legal proceedings against the employer in the Employment Tribunal or in the civil courts
• A statement that the first £30,000.00 of the lump sum payment by way of compensation for loss of office can be paid tax free, but that the employee provides a tax indemnity to the employer in respect of any tax due
• That there will be confidentiality in relation to trade secrets, the existence of the Settlement Agreement, and the terms and conditions of the Settlement Agreement
• No derogatory remarks by either party in relation to the other
• That the employer will provide an agreed reference for the employee to prospective future employers, a copy of the agreed wording of which is annexed to the Settlement Agreement
• The position on post termination restrictive covenants is often set out
• Return of employers property by employee
• Confirmation that the employee has received independent legal advice