Why You Should Sign A Reasonable Settlement Agreement

what is a reasonable settlement agreement?

If you are an employer or an employee, it is likely that you have encountered this question at least once. In case you do not know what this agreement is, this article will tell you everything you need to know about this particular agreement. This article will also tell you why it pays to have this agreement and the benefits for both employer and employee.

More information on what is a reasonable settlement agreement

Understanding the Reasonable Settlement Agreement

The key words here are "reasonable" and "settlement". This agreement is a legally binding document and the parties to the agreement are usually an employer on the one hand, and an employee on the other hand. The purpose of this agreement is for both parties to part ways on amicable terms by observing the terms of the said agreement. Usually, the employee accepts a certain amount of money from the employer as a settlement. In return that employee waives certain rights including the right to prosecute the employer or to drag the employer before a tribunal. Meanwhile, the employee gets the cash as well as excellent references from the employer. This way both parties are happy with the deal. 

Why Would Employer and Employee Consider this Agreement?

One of the best things about this agreement is that it saves time. The two parties can draw up the agreement in a matter of days and tidy up everything in less than a week. The employee usually receives the cash within 7-28 days or on the next payday. In addition, this agreement removes the possibility of a long and acrimonious litigation. The agreement also means the two parties can part on amicable terms and may even do business together in future. 

How Much Do Employees Typically Receive?

There are no fixed sums because each agreement depends on a number of variables. However, it is safe to state that employees in many instances receive 1-4 four months salary plus some more cash as "notice money". You can even get more money if you have evidence of discrimination or whistle blowing. 

Talk to Your Lawyer

If your employer offers you a reasonable settlement agreement, you should not accept the offer without consulting your legal expert. The agreement might look good on paper but you should show it to your solicitor in case there are some things in the small print that may not be in your interest. Once your lawyer signs off on the agreement, you can go a head and accept it. 

Does the Employer Give Up anything by Accepting the Agreement?

The answer is a resounding "Yes". When you accept this agreement, you give up your right to prosecute the employer. This means there are times you may wonder what might have been if you had rejected the agreement and opted for litigation. This applies to the employer too but it is always better to sign and keep this agreement. 

Final Word

Clearly, this agreement makes sense because it has a number of benefits. Take advantage of this document and you will avoid a bit of inconvenience, uncertainty and bad blood.