Negotiating and Preparing Settlement Agreements

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What are settlement agreements?

Settlement agreements are drafted to protect your business’ interests when finalising the employment of an employee.  They are generally used if the employment did not end amicably.

When should you present an employee with a settlement agreement?

If an employee is seeking any payout in relation to their employment, it would be a good idea to engage us to draft a settlement agreement for you.  This will protect your rights and ensure that the employee releases you from any future claims.  It keeps the matter clean and professional.

What are your options?

Settlement agreements come in all shapes and sizes.  It is usually a good idea to get an understanding of what your employee may want and offer something that they will accept if you do not want to enter into lengthy negotiations or be outright refused.

How do our employment lawyers help you?

We can draft settlement agreements for you or amend existing agreements if required.

Frequently Asked Questions

I want to terminate an employee and offer them 2 months’ pay, what benefit do I have by asking them to sign a settlement agreement?

The agreement will protect you from any further liability in relation to employment and will give you a chance have them sign non-denigration and confidentiality clauses further protecting your business.

An employee has accepted a resignation package but is not willing to sign the settlement agreement.  Should I take the offer off the table or do I need to honour it?

This is a difficult one to answer.  It depends on how the offer and acceptance came about.  For example, if it came about through a fair work commission application then the Fair Work Commission will usually assist in enforcing the agreement, otherwise it could be that you have to the matter to court and have a judge decide whether offer and acceptance occurred.

Can I include an indemnity in a settlement agreement?

The short answer is yes.  You can include anything in the agreement but remember you need to convince the other side to sign it too.

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