EMP9
Negotiating Settlements
Negotiating settlements
Sometimes referred to as compromise agreements / settlement agreements
Settlement Settlement agreements are legally binding contracts which can be used to end the
Agreements employment relationship on agreed terms.
Main feature: Waive an individual’s right to make a claim to a court or ET on
the matters that are specifically covered in the agreement
How? Statutory claims (e.g. UD/redundancy/disc)
- Need a formal approach to recording settlement as well as in writing
- Any agreement to settle and not to pursue a statutory claim is VOID unless:
It is recorded by the ET – e.g. if settle on day of hearing date, judge can
record terms of settlement and that will be binding
It is recorded in a formal settlement agreement
It is negotiated/settled via ACAS, recorded on COT3 form and claim to ET
will be withdrawn
Contractual claims (e.g. W.Dismissal)
- Record in writing Will be a contract of compromise – So will be enforceable if
one side do not honour agreement
If settlement is made just between solicitors, the terms will need to be recorded in a
settlement agreement if it is a statutory claim (e.g. UD/redundancy/disc)
If settled between solicitors, would need to send a letter to ET or send a COT4 to
withdraw the claim if proceedings have started = Both do the same thing
How to make For a settlement agreement to be legally valid the following conditions must be met:
a VALID A written agreement (a ‘settlement agreement’) is entered into.
settlement o In order for a settlement agreement to be binding it must:
agreement? Be in writing
Identify an adviser
Relate to the particular complaint and state that the relevant statutory
conditions are satisfied
A settlement agreement which seeks to exclude all possible claims
will fall foul of s203.
The agreement must only seek to settle those statutory claims
which have already been raised (either by presentation to the
tribunal or raised by the employer prior to the issue of
proceedings).
The employee or worker must have received advice from a relevant
independent adviser as to the terms and effect of the proposed agreement
and, in particular, its effect on his ability to pursue his rights before an
employment tribunal, and
The adviser must be “independent” i.e. not be employed by the
Negotiating Settlements
Negotiating settlements
Sometimes referred to as compromise agreements / settlement agreements
Settlement Settlement agreements are legally binding contracts which can be used to end the
Agreements employment relationship on agreed terms.
Main feature: Waive an individual’s right to make a claim to a court or ET on
the matters that are specifically covered in the agreement
How? Statutory claims (e.g. UD/redundancy/disc)
- Need a formal approach to recording settlement as well as in writing
- Any agreement to settle and not to pursue a statutory claim is VOID unless:
It is recorded by the ET – e.g. if settle on day of hearing date, judge can
record terms of settlement and that will be binding
It is recorded in a formal settlement agreement
It is negotiated/settled via ACAS, recorded on COT3 form and claim to ET
will be withdrawn
Contractual claims (e.g. W.Dismissal)
- Record in writing Will be a contract of compromise – So will be enforceable if
one side do not honour agreement
If settlement is made just between solicitors, the terms will need to be recorded in a
settlement agreement if it is a statutory claim (e.g. UD/redundancy/disc)
If settled between solicitors, would need to send a letter to ET or send a COT4 to
withdraw the claim if proceedings have started = Both do the same thing
How to make For a settlement agreement to be legally valid the following conditions must be met:
a VALID A written agreement (a ‘settlement agreement’) is entered into.
settlement o In order for a settlement agreement to be binding it must:
agreement? Be in writing
Identify an adviser
Relate to the particular complaint and state that the relevant statutory
conditions are satisfied
A settlement agreement which seeks to exclude all possible claims
will fall foul of s203.
The agreement must only seek to settle those statutory claims
which have already been raised (either by presentation to the
tribunal or raised by the employer prior to the issue of
proceedings).
The employee or worker must have received advice from a relevant
independent adviser as to the terms and effect of the proposed agreement
and, in particular, its effect on his ability to pursue his rights before an
employment tribunal, and
The adviser must be “independent” i.e. not be employed by the
