Settlement Agreement Fixed Fee for the United Kingdom

Settlement Agreement Fixed Fee Template for England and Wales

A Settlement Agreement Fixed Fee is a legally binding contract used in England and Wales to formally end an employment relationship between an employer and employee. It typically involves the employer offering a financial settlement in exchange for the employee agreeing to waive their rights to bring certain legal claims. The agreement must comply with specific statutory requirements, including the provision of independent legal advice to the employee. The fixed fee nature of the agreement provides certainty regarding legal costs.

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What is a Settlement Agreement Fixed Fee?

The Settlement Agreement Fixed Fee is commonly used in England and Wales when employment relationships need to be terminated in a mutually agreed and legally secure manner. This document is particularly useful when companies want to manage their risk and ensure certainty of costs while ending employment relationships. It provides a comprehensive framework for settling potential claims, detailing payment terms, and establishing post-employment obligations. The fixed fee structure makes it particularly attractive for businesses seeking cost predictability in their legal arrangements.

What sections should be included in a Settlement Agreement Fixed Fee?

1. Parties: Identification of the employer and employee

2. Background: Context of the settlement and employment relationship

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specification of employment end date and final working arrangements

5. Settlement Payments: Details of all payments to be made including timing and method

6. Tax Treatment: Tax implications of payments and tax indemnities

7. Waiver of Claims: Employee's waiver of legal claims and statutory rights

8. Confidentiality: Obligations regarding confidentiality of the agreement and company information

9. Legal Advice: Confirmation of independent legal advice received by the employee

What sections are optional to include in a Settlement Agreement Fixed Fee?

1. Post-Termination Restrictions: Restrictions on future employment activities and competition

2. Reference: Terms of future employment references and communication about departure

3. Company Property: Requirements for return of company assets and intellectual property

4. Outplacement Support: Details of any career transition services provided

5. Garden Leave: Terms of any garden leave period prior to termination

What schedules should be included in a Settlement Agreement Fixed Fee?

1. Schedule 1: Payment Details: Detailed breakdown of settlement payment components

2. Schedule 2: Adviser's Certificate: Independent legal adviser's confirmation of advice given

3. Schedule 3: Agreed Reference: Template of agreed reference text

4. Schedule 4: Resignation Letter: Template resignation letter if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Fee Agreement

Cost

Free to use
Industries

Employment Rights Act 1996: Primary legislation governing employment rights, particularly sections related to waiver of statutory rights and requirements for valid settlement agreements. Section 203 specifically outlines the requirements for valid settlement agreements and the necessity of independent legal advice.

Equality Act 2010: Legislation covering protection against discrimination, waiver of discrimination claims, and protected characteristics that must be considered in settlement agreements.

Trade Union and Labour Relations (Consolidation) Act 1992: Legislation covering collective bargaining rights and trade union involvement in settlement agreements.

ACAS Code of Practice on Settlement Agreements: Best practice guidelines and procedural requirements for settlement agreements, providing practical guidance on implementation.

General Data Protection Regulation (GDPR) and Data Protection Act 2018: Data protection legislation governing how personal information should be handled and protected within settlement agreements.

Taxes Management Act 1970 and Income Tax (Earnings and Pensions) Act 2003: Tax legislation governing the treatment of settlement payments, including distinction between taxable and non-taxable payments.

Companies Act 2006: Corporate legislation relevant for settlements involving company directors and corporate authority matters.

Limitation Act 1980: Legislation setting out time limits for bringing claims and relevant limitation periods that may affect settlement terms.

Working Time Regulations 1998: Regulations governing holiday pay considerations and working time rights that may need to be addressed in settlement agreements.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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