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Know your Rights wording

What you need to consider before signing a Settlement Agreement.

16th July 2020 by What you need to consider before signing a Settlement Agreement.

Categories: Covid-19, Employment News
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Back in March, the Government introduced the concept of furlough leave under the Coronavirus Job Retention Scheme, to support employees who may otherwise likely be made redundant, in an attempt to avoid large scale unemployment. Many employers have opted to furlough their staff, but the reality is that some have had to make the difficult decision to make staff redundant or offer them settlement agreements.

What is a Settlement Agreement?

Settlement agreements are used to record what an employer and employee have agreed about the ending of employment. They are common, but every employee will have different needs and concerns.

If you have been offered a settlement agreement here are Laceys top 5 points you should consider before signing;

  • Could the wording of a reference cause you problems when applying for a new job?
  • What is it that is said to be ‘confidential’ and is this fair and possible to agree to?
  • Are you restricted in who you can work for and where – should you agree?
  • Are you agreeing to do anything which is outside your control?
  • Are any of the clauses uncertain or the consequences potentially unknown?

Why do I need to seek Independent legal advice if I have been offered a Settlement Agreement?

The law requires an employee to receive Independent legal advice on a settlement agreement before agreeing to the terms due to the significant rights that the employee will be giving up by agreeing to a settlement agreement.

In addition, the current job market is extremely insecure and unlikely to stabilise in the near future, so you need to make sure you are making informed choices for the best outcome.

What will I have to pay?

It is expected that an employer will contribute to the costs of an employee receiving legal advice on a settlement agreement. Employers vary in the amount that they will pay.

Laceys will be clear from the start about costs and whether or not the employer’s contribution will cover our costs. If not, we will help you make a decision and what options you have.

If you would like further advice on a settlement agreement please contact Robin Watson in confidence on 01202 755204 or email

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