Settlement Agreements
Standard Terms

There are a number of standard terms within settlement agreements.

Standard Terms Within Settlement Agreements

The standard terms that are contained within most settlement agreements, are as follows:-

• A lump sum payment to be made to the employee as compensation for loss of office
• The Employee agrees not to pursue a claim/legal proceedings against the employer in the Employment Tribunal or in the civil courts
• A statement that the first £30,000.00 of the lump sum payment by way of compensation for loss of office can be paid tax free, but that the employee provides a tax indemnity to the employer in respect of any tax due
• That there will be confidentiality in relation to trade secrets, the existence of the Settlement Agreement, and the terms and conditions of the Settlement Agreement. However, there is also confirmation that the confidentiality provisions do not apply to and are overridden by protected disclosures
• No derogatory remarks by either party in relation to the other
• That the employer will provide an agreed reference for the employee to prospective future employers, a copy of the agreed wording of which is annexed to the Settlement Agreement
• The position on post termination restrictive covenants is often set out
• Return of employers property by employee
• Confirmation that the employee has received independent legal advice