Settlement agreements and severance packages

Settlement agreements and severance packages

Settlement agreements are entered into in a variety of situations, most often where an employee has agreed with the employer that the employment is to terminate and the employer has offered a severance package. They can also arise as a result of a dispute between an employee and employer, causing the employee to leave the business due to dismissal or by resigning. Settlement agreements can be particularly beneficial where an employee is on long-term sick leave or has performance concerns, and the parties wish to avoid a protracted dismissal process.

The settlement package will usually cover compensation for loss of employment, pension arrangements, references and benefits arising from the employment.

A settlement agreement ensures that the employee agrees to waive any legal claims (subject to a few which cannot lawfully be conceded) against the employer in return for a termination payment.

Our team is highly experienced at advising on exit strategies and settlements including:

  • The best tactics when looking to make a settlement offer to an employee
  • “Without prejudice” meeting scripts; together with tailored or template correspondence
  • Assistance with the negotiation of severance packages
  • Drafting settlement agreements bespoke to the particular circumstances

The employment team at Sherrards has the necessary expertise so that you can be sure the exit process is handled with discretion and in a way that protects your business as far as is possible.