SETTLEMENT AGREEMENT
This Agreement is made between:
(1) [employerName] of [employerAddress] (the "Employer"); and
(2) [employeeName] of [employeeAddress] (the "Employee").
1. Definitions and background
1.1. The Employee was employed by the Employer from [employeeStartDate] as [employeeJobTitle]. The Employee's employment terminates on [terminationDate] (the "Termination Date") by reason of [terminationReason].
2. Termination payments
2.1. Subject to clause 3, the Employer will pay the Employee:
(a) an ex-gratia compensation sum of £[exGratiaPayment] (the "Termination Payment"), of which the first £30,000 is paid free of tax and National Insurance Contributions under sections 401 and 403 of the Income Tax (Earnings and Pensions) Act 2003;
(d) a contribution of ££750 + VAT (where applicable) to the Employee's legal-advice costs, paid directly to the Employee's adviser within 14 days of receipt of an invoice addressed to the Employee marked payable by the Employer.
2.2. The Employer will pay the sums above within 21 days of (a) the Termination Date, and (b) receipt of this Agreement signed by the Employee and the adviser's certificate.
3. Waiver of claims
3.1. The Termination Payment is paid in full and final settlement of all and any claims, costs, expenses or rights of action of any kind whatsoever, whether under statute, common law, or in equity, that the Employee has or may have against the Employer, its officers, employees, or related entities, arising out of or connected with the Employee's employment or its termination, including (without limitation):
(a) breach of contract and wrongful dismissal; (b) unfair dismissal under Part X of the Employment Rights Act 1996; (c) discrimination, harassment and victimisation under the Equality Act 2010; (d) detriment and dismissal for whistleblowing; (e) unauthorised deductions from wages and unpaid holiday pay; (f) statutory redundancy payment; (g) failure to inform and consult under TULRCA 1992; (h) any breach of the Working Time Regulations 1998; (i) any other employment-related claim arising up to the date of this Agreement.
3.2. The waiver in clause 3.1 does NOT apply to:
(a) any claim for personal injury that the Employee is not (and could not reasonably be) aware of at the date of this Agreement; (b) accrued pension rights; (c) any claim to enforce the terms of this Agreement.
4. Section 203 Employment Rights Act 1996 — independent advice
4.1. The Employee confirms that:
(a) the Employee has received independent legal advice from [adviserName] of [adviserFirm], [adviserAddress] (the "Adviser") about the terms and effect of this Agreement and in particular its effect on the Employee's ability to pursue any complaint to an Employment Tribunal;
(b) the Adviser is a "relevant independent adviser" within the meaning of section 203(3A) of the Employment Rights Act 1996 and has a current contract of insurance covering the risk of a claim by the Employee in respect of loss arising from the advice;
(c) the conditions regulating settlement agreements under the Employment Rights Act 1996 (and equivalent provisions in other relevant statutes) are satisfied.
5. Reference
{{^referenceText}}5.1. The Employer is under no obligation to provide a reference.{{/referenceText}}
6. Confidentiality
6.1. Save as required by law, neither party will disclose the existence, terms, or circumstances of this Agreement to any third party other than: (a) immediate family, professional advisers and (where applicable) HMRC; (b) in confidence to recruitment agents and prospective employers in general terms only.
7. Return of property
7.1. The Employee will return all property of the Employer (including company laptops, phones, ID cards, keys, documents, electronic data) by the Termination Date.
8. Restrictive covenants
8.1. Any post-termination restrictions in the Employee's contract of employment continue in force in accordance with their terms.
9. Non-derogatory statements
9.1. Neither party will make any derogatory or disparaging statements about the other.
10. Tax
10.1. The Employee is responsible for any further income tax or NICs due on the Termination Payment in excess of any tax already deducted. The Employer makes no representation about the tax treatment of the payment beyond what is stated in clause 2.
11. Entire agreement
11.1. This Agreement is the entire agreement between the parties on its subject matter and supersedes all prior negotiations and agreements.
12. Governing law and jurisdiction
12.1. This Agreement is governed by the law of England and Wales. The courts of England and Wales have exclusive jurisdiction.
Signed by the Employer:
Name: ____________________________
Position: __________________________
Signature: _________________________
Date: ____________________________
Signed by the Employee:
Name: ____________________________
Signature: _________________________
Date: ____________________________
Adviser's Certificate (s.203 ERA 1996)
I, [adviserName] of [adviserFirm], [adviserAddress] confirm that:
(a) I am a "relevant independent adviser" within the meaning of section 203(3A) of the Employment Rights Act 1996;
(b) I hold a current contract of insurance covering the risk of a claim by the Employee in respect of loss arising from the advice given to the Employee in connection with this Agreement;
(c) I have advised [employeeName] as to the terms and effect of this Agreement and in particular its effect on the Employee's ability to pursue any complaint before an Employment Tribunal.
Signature: _________________________
Date: ____________________________
This template is provided by UKContracts.uk as a starting point only. UKContracts.uk is not a law firm and the Employee MUST receive independent legal advice from a qualified adviser before signing.