The Settlement Agreement will contain specific information relating to the terms of the settlement offered to you, including a proposed termination date and a financial package.
The terms of your Settlement Agreement
It is likely that your Settlement Agreement will contain terms relating to the following:
- The date on which your employment will terminate.
- What will happen between the date the Settlement Agreement is signed and the date of termination.
- If you have accrued holiday by the termination date, you should receive a payment in lieu of this.
- If you are not required to work your notice period, a payment in lieu of notice.
- If you are being made redundant and have at least 2 years’ qualifying service, you should receive a statutory redundancy payment.
- If you are being made redundant, you may receive an additional redundancy payment.
- You may receive a payment in compensation for loss of employment.
- There may be a clause relating to share options or similar incentive plans to which you may have been entitled to as part of your employment.
- You may, in some cases, be offered a payment in compensation for injury to feelings.
- The date or dates when you are entitled to receive the payments due under the Settlement Agreement.
- There may be an agreed reference.
- Some property belonging to your employer may be transferred to you e.g. a mobile phone, laptop, personal computer or company vehicle.
- You may retain shares or share options.
- You may be offered out-placement counselling or other services post-termination.
- You may be released from restrictive covenants or new covenants may be introduced in the Settlement Agreement.
- You are likely to be offered a contribution to your legal costs in entering into the Settlement Agreement.
There may be additional clauses relating to the particular terms offered or negotiated in relation to the termination of your employment.
Common additional clauses contained in Settlement Agreements
All Settlement Agreements contain a number of clauses to relating to the implementation of the terms of agreement and dealing with post-termination relations:
- There will be a clause agreeing to give up your employment claims in return for the payments to be made in the agreement.
- If a payment in the agreement is being paid without deduction of tax, there is likely to be a tax indemnity.
- There will usually be a confidentiality clause (sometimes called a ‘non-disclosure clause) requiring the terms of the agreement are kept secret – and sometimes requiring the existence of the agreement is also kept secret.
- There is usually a non-disparagement clause, requiring the parties to agree not to make derogatory remarks about the other following the making of the agreement.
- You may be required to state that you have not been guilty of any misconduct of which your employer is unaware.
- You may be required to state that you do not have another job to go to.
There will be also be a number of legal boilerplate clauses relating to the legal status of the agreement and any associated documents.
For more information on your settlement agreement, please email info@gssettlementagreements.co.uk or contact the team on 020 8305 3544.