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A settlement agreement is a legal contract between an employer and employee where the employee waives their rights to pursue employment claims in exchange for a discretionary termination payment, such as an enhanced redundancy or compensation for loss of office. It is mandatory for employees to receive independent legal advice regarding the agreement's terms and their rights. The legal adviser must evaluate the potential claims, their merits, and their value. These factors, along with the stresses and costs of pursuing claims, should be considered against the offer to assess its reasonableness. In some instances, it may be possible to negotiate a higher settlement even if the employee lacks strong claims.
