Specific provisions that should be included in a settlement agreement?| Orwins | Orwins

Specific provisions that should be included in a settlement agreement?

Settlement Agreements can include a range of provisions, depending on the circumstances and whether employment has already ended.

That said, during the assessment of a settlement agreement, there are some elements you should look out for; see them below.

However, there are some key elements that should always be present. We set these out below so you know exactly what to look out for…

Insights Published: 04 December 2023

Settlement agreement provisions

All Settlement Agreements should include some standard provisions, including, but not limited to:

#1 Agreement to Waive Legal Action

The agreement should confirm that the employee will not bring any legal claims against the business, and that any existing claims will be withdrawn.

#2 Financial Details

The agreement should set out any outstanding payments, such as salary, holiday pay, notice pay, commission, or bonuses.

It should also confirm any tax-free termination payment and specify the contribution towards the employee’s legal fees.

#3 Confidentiality Clauses

Confidentiality clauses are usually included, so neither party can discuss the terms of the agreement with anyone other than their legal adviser or partner.

#4 References

The agreement should confirm that the business will provide a written reference upon request, with the wording agreed in advance.

It will usually also include a clause to prevent either party from making negative comments about the other.

#5 Further inclusions

Settlement agreements should also require the employee to cooperate if they are needed in future tribunal proceedings involving another employee.

The solicitor’s certificate must be included and it is essential to check that all details are correct before signing, as missing information can lead to future disputes.

Talk to Orwins for settlement legal assistance

Settlement agreements can be highly effective in resolving legal disputes in a clear, legally binding manner, but only when correctly drafted.

Given the legal implications, it is essential to review every detail thoroughly before signing, we recommend speaking to our settlement solicitors at Orwins for more information.