An employer cannot contract out of an employee’s right to present a claim to an employment tribunal unless either they negotiate a COT3 agreement through Acas or there is a Settlement Agreement. Essentially, the Settlement Agreement is a legal contract which is intended to waive any employment-related claims and achieve a binding clean break “full and final settlement” between the parties.
There are six statutory conditions which are required for a Settlement Agreement to be valid:
- The agreement must be in writing.
- It must relate to a “particular complaint”.
- The employee must have received independent legal advice.
- The employee’s adviser must have a policy of insurance in force.
- The agreement must identify the employee’s legal adviser.
- The agreement must state that the statutory conditions relating to Settlement Agreements have been satisfied.
The employer will usually agree to pay a fixed amount towards the legal costs for the employee to get independent legal advice on the terms and effect of the Settlement Agreement.
Typically the advice will be given by a specialist employment solicitor (but it could also be from a trade union representative or advice worker authorised to advise on these agreements).
Nowadays Settlement Agreement meetings don’t have to take place personally ‘face to face’. Frequently these meetings can be dealt with remotely, and the solicitors are able to have consultations over video call or telephone.