Settlement agreements are most often used as an alternative to a disciplinary, performance or redundancy procedure, or to manage grievances such as claims of constructive dismissal or unlawful discrimination.
A settlement agreement is a legally binding agreement made between an employer and an employee, so it’s essential that you understand what it is before you think about whether this is the right solution for your organisation. And because an employee agrees not to pursue a particular claim that they may have in relation to their employment – or its termination – it is a high-risk process for them, too.