Settlement agreements are legally binding contracts in which one person, usually an employee, agrees to waive their rights to bring a claim in the employment tribunal or a court in return for another person, typically their employer, agreeing to do something, such as paying them a sum of money and agreeing to give them a reference.
As Kalpesh Nakeshree, employment lawyer at Ware & Kay in York, Wetherby & Malton explains, used properly settlement agreements can be an effective tool for dealing with workplace problems in a discrete and controlled way:
'If you have an issue with an employee or someone else who works for you, negotiating a mutually acceptable resolution is often the best way to deal with things. Recording the terms of that resolution in a settlement agreement ensures there can be no…