11 May 2020

Settlement Agreements and COVID-19

Due to the unprecedented situation with COVID-19 and the uncertainty that the pandemic has caused, many employers may now be considering redundancies to help navigate their business through these uncertain times.

What is a Settlement Agreement?

Some employers may offer their employees a Settlement Agreement, which is a legally binding document that usually includes a compensation or ex-gratia payment which is over and above the employee’s contractual entitlement or their statutory redundancy entitlement. These payments are offered in return for the employee agreeing not to pursue any claims against their employer.

Why does an employee have to obtain advice in respect of a Settlement Agreement?

For a Settlement Agreement to be legally binding, an employee has to receive independent legal advice on the terms and effect of the Agreement. The legal adviser must sign an Adviser’s Certificate to confirm that advice has been given.

Who pays the legal fees for the Settlement Agreement advice?

Employers normally contribute towards the legal costs of obtaining advice in relation to the Settlement Agreement.

How can I obtain advice during the COVID-19 pandemic?

We are currently offering telephone or video meetings to advise clients in relation to Settlement Agreements to ensure that social distancing guidelines are complied with.

We appreciate that in situations such as this, you may want to obtain advice and bring matters to a conclusion as quickly as possible and this is something we can help with. We can offer a meeting at short notice and will contact your employer promptly following the meeting to raise any concerns or issues in respect of the terms of the Agreement.

Once terms have been agreed, we will arrange for you to sign the Agreement and then return the Agreement to your employer, together with the Adviser’s Certificate.

If you need any help or advice, please get in touch with Jo Cullen or Chloe Baxter in our employment law team. They will set you on the right legal path.

our lawyers deliver an excellent quality service, independently recognised by The Law Society and our many returning clients.

important notice

Howell Jones solicitors remains open for business during the COVID-19 pandemic.


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