Typically, an employer will offer a settlement agreement to an employee however it is not unheard of for employees to request them from an employer.
Settlement agreements can be used in the following situations:
A dispute has arisen which could lead to an Employment Tribunal claim, for example unfair dismissal, breach of contract or discrimination. In this case, an employer may choose to offer a settlement agreement as opposed to following a more formal procedure.
As an alternative to redundancy, whether voluntary or compulsory, or change of position due to restructuring.
Due to the poor performance of an employee and neither party wishes to follow a formal route, therefore acting as an alternative to undergoing a disciplinary or capability process.
By signing a settlement agreement, both you and your employer agree to settle any potential claims against each other, providing a clear, swift and agreed-upon resolution.