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Why would a company offer a settlement agreement?

Employers will offer a Settlement Agreement when they want to terminate a contract on terms mutually agreed with you. This is so that there is a clean break with no opportunity for you to take them to court or a tribunal for more money. There is a range of scenarios in which Settlement Agreements are used.

What does a settlement agreement cover?

What does a Settlement Agreement cover? It often settles all actual or potential legal claims that an employee may have against an employer connected to employment or the fact that employment is ending, such as unfair dismissal or discrimination claims.

Is a settlement agreement a dismissal?

Does my employer have to give me a settlement agreement if it is dismissing me? No, settlement agreements are not compulsory and there is no obligation on an employer to provide one in the event it dismisses an employee (for whatever reason).

How much should I expect in a settlement agreement?

The rough 'rule of thumb' that is generally used to determine the value of a settlement agreement (in respect of compensation for termination of employment) is two to three months' gross salary.