Employers and employees are often faced with the dilemma as to whether they should settle outside court or whether they should take the potential claim to an employment tribunal. Often the word “principle” comes into play. That is business and individuals alike believe that taking the case forward is about “principle”, however more often than not when employees and businesses fully understand the cost implications they may change their view and appreciate that settling a claim could not be a bad option after all. Of course one cannot generalise and say that all claims should be settled but whether the decision is to settle or take the matter to court, it is of utmost importance to understand the likelihood of success of the claim in question, as well as, the cost implications of this. Furthermore there is the time element which must also be taken into account too – time costs money. If you decide to settle a potential claim it is always advisable to do so through what is known as a settlement agreement.
The aim of the settlement agreement is that an employee will not pursue any employment law claims against his/her employer and in return for giving up the claims the employee will be given financial or some other form of compensation.
A settlement agreement will be binding under the law on the employee and the employer – in order to make sure that the employee is aware of what s/he is committing to, it will be a requirement of the agreement, for the employee to obtain independent legal advice.
If you require further information on settlement agreements please give us a call for a free initial consultation by phone.