Who is involved in a settlement agreement?

Only the employer and employee – these agreements should be decided through collaboration between the two parties, though they must both seek independent advice from experienced solicitors as this area of law is very complex. Both parties should be clear about their options and rights before accepting the deal, and both may attempt to negotiate.

A further argument for employers to take legal guidance when drafting such agreements is that a legal decision in the past has been made in a former employee’s favour on the basis that the wording used in the document rendered it ineffective. In legal cases, terminology and phrasing can be the difference between an effective and ineffective contract.