Episode 11: What Claims Can Be Waived Under a Settlement Agreement?

Settlement Agreement Solicitor

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The Settlement Agreement Solicitor

Episode 11: What Claims Can Be Waived Under a Settlement Agreement?

Welcome back to 'The Settlement Agreement Solicitor' podcast. I’m Geoffrey Caesar, a solicitor with over 20 years of experience in employment law, and as always, we’re diving deep into the world of settlement agreements. This podcast is your go-to for practical tips and insights on everything related to settlement agreements.

In this episode, we’re tackling a crucial question: What claims can be waived under a settlement agreement?

If you are in the process of considering a settlement agreement, this is something you definitely want to understand. Knowing what claims you are giving up can help you make informed decisions about whether to sign or negotiate further.

Let’s start with the basics. What is a settlement agreement? In simple terms, a settlement agreement is a legally binding contract between an employer and an employee. The employee, in exchange for a payment or other benefits, agrees to waive certain claims or rights they have against the employer. But the key question is – what exactly are those claims?

The first thing to know is that a settlement agreement usually involves the waiver of employment-related claims. These can include claims for unfair dismissal, breach of contract, discrimination, or unpaid wages. So, if you’ve been dismissed, for instance, one of the main claims the employer will want you to waive is your right to bring an unfair dismissal claim to an employment tribunal.

Let’s break it down further with some common claims that are typically covered:

1. Unfair Dismissal – This is a big one. In most cases, employers want to avoid the risk of an unfair dismissal claim, which could otherwise lead to costly tribunal proceedings. By signing the settlement agreement, you waive your right to pursue this claim.

1. Discrimination – Discrimination claims based on race, gender, disability, or other protected characteristics under the Equality Act can also be waived. These types of claims can be particularly valuable to the employee, so you need to carefully consider whether the compensation offered in the agreement adequately reflects the seriousness of the claim.

1. Redundancy Pay – If your role has been made redundant, a settlement agreement will typically include a waiver of claims for any additional redundancy pay beyond what’s been agreed. Remember, you’re often entitled to statutory redundancy pay regardless of whether you sign a settlement agreement.

1. Holiday Pay and Wages – Unpaid wages or holiday pay that you might still be owed can also be included. Employers usually want to settle all outstanding payments under the agreement to ensure there’s nothing left to argue about later.

And that’s not all. The agreement may also cover things like bonuses, commission payments, and even claims under the Working Time Regulations for not receiving appropriate breaks.

But it’s important to note: not all claims can be waived under a settlement agreement.

There are some rights that you simply can’t contract out of. For instance:

• Personal Injury Claims – Any personal injury claims that you don’t yet know about are usually excluded. This means if you develop a condition related to your work after the agreement has been signed, you could still potentially bring a claim for that.

• Pension Rights – Settlement agreements cannot waive your accrued pension rights. Whatever benefits you’ve built up in a workplace pension scheme up until the point you leave will still be yours.

• Future Claims – You can only waive claims that exist at the time the settlement agreement is signed. If something happens after that date, such as a breach of the terms of the settlement agreement itself, you could still have the right to make a claim.

This is why independent legal advice is not just a formality – it’s essential. The law requires that you get legal advice on a settlement agreement to ensure you fully understand the consequences of waiving your claims. As an experienced solicitor, my role is to ensure that you’re clear on what you’re giving up and that the terms of the agreement are fair and reasonable in the circumstances.

Now, let’s touch on some practical advice when it comes to negotiating the waiver of claims. If you believe you have a strong discrimination or unfair dismissal claim, it might be worth negotiating for a higher settlement amount. Employers are often willing to pay more to avoid the cost, time, and risk associated with defending a claim in tribunal.

Lastly, consider how the waiver of these claims affects your future. For example, if you’re waiving a potential discrimination claim, will you be compensated enough to reflect the loss of your legal rights? It’s about finding that balance between the compensation on offer and the value of the claims you’re giving up.

So, to summarise this episode, a settlement agreement typically waives claims such as unfair dismissal, discrimination, redundancy pay, and unpaid wages, but it doesn’t cover things like personal injury claims that you don’t know about, pension rights, or future claims.

As always, getting independent legal advice is crucial to ensure you understand what is being waived and whether the offer on the table is fair.

That’s it for this episode. If you’ve received a settlement agreement or you are just curious to learn more about what your rights are, feel free to get in touch with me at gcaesar.com.

I am here to help you navigate these tricky waters and make sure you are protected.