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Breach Of Settlement Agreement By Employer

Breach Of Settlement Agreement By Employer

Breach of confidentiality by employer

If you have reached a settlement agreement with your employer, both parties are legally obligated to adhere to the terms agreed. In this article we will tell you what to do if your former employer has breached the terms of the settlement agreement and what compensation you may be entitled to receive as a result.

An employee settlement agreement is a legally binding contract which normally brings the relationship between an employer and an employee to an end on terms agreed by both parties. Employee settlement agreements are most commonly used in cases of restructure or redundancy, breach of contract, or when employee’s performance issues lead to the termination of employment.

Have you experienced a breach of settlement agreement by your employer? Both the employer and employee are bound by the terms agreed so if your employer has breached these terms then you may be able to seek damages against the employer for a breach of contract. You should contact your solicitor at the earliest possible opportunity to discuss pursuing legal action against them.

At Hattons Law we have a team dedicated to dealing with all matters surrounding settlement agreements on behalf of our clients in and around the North West of England. From the simplest to the most complex of cases and we can help you to ensure you receive the compensation you deserve if the terms of your settlement agreement have been breached by your employer.

Discuss your case with Hattons today 

Read on to find out what actions are classed as a breach of settlement agreement, the consequences that may occur as a result and what to do if your employee has breached the terms of your agreement. 


What Is An Employee Settlement Agreement?

An employment settlement agreement is a legally binding agreement between an employee and employer that sets out the terms of a severance payment and any obligations due to the employee normally on the termination of their employment.

In most cases, an amount of money agreed by both parties is paid to the employee in return for a completely clean break and severance of their relationship with their employer. Employee settlement agreements will be made in writing by a solicitor and clearly set out the dispute in question and the terms and financial compensation being agreed to as well as any confidentiality clauses that should be observed.

The result of a settlement agreement is that identified claims for compensation can not be later brought against the employer in the future after everyone has gone their separate ways – unless a breach of this settlement agreement occurs.

Find out more: Employee settlement agreements 


When Is A Settlement Agreement Breached?

when confidentiality is breached

Any deviation from the terms set out as part of an employee settlement agreement can be seen as a breach of settlement agreement. Breaches of settlement can occur by either the employee or the employer but for the purpose of this article, we are focusing on breach of settlements by the employer and have outlined some of the most common occurrences below:

Confidentiality, Derogatory Comments and Provision of a Reference

Employee settlement agreements will usually include a confidentiality clause which prevents either party discussing the terms of the settlement with anyone else or making negative comments about the other side after the settlement is agreed. This is intended to protect those involved from having the terms of the agreement becoming public knowledge or protect damage to reputation that may occur as a result.  This is made more important when the employer agrees to provide a specific employee reference, but either do not provide it or do not provide it in the terms agreed.  If confidentiality, non-derogatory or the provision of a specific employee reference terms are breached, then you could bring a claim against your former employer.

Issues With Payments

One of the most important aspects of an employee settlement agreement is the financial figure awarded to the employee. If the amount agreed is delayed or not paid in full in line with the payment terms agreed in the settlement agreement then you may have a case to bring a claim against your former employer for a breach of settlement agreement.


What Happens If Your Employer Breaches A Settlement Agreement?

If an employer breaches the terms of an employee settlement agreement, the consequences will vary depending on the exact breach and terms of the details of the original agreement. The most sensible thing for the employee to do in this situation is to seek legal advice on the options available to them. A solicitor will then try to resolve the issue between the two parties rather than taking the matter to court if possible.

If a resolution to the breach of contract cannot be agreed between the two parties via a solicitor then the employee may instruct their legal team to pursue litigation for a breach of contract against the employer. This claim is intended to seek a damages payment to compensate the employee for the losses suffered as a result of the employers breach of settlement agreement.

Either of the routes above can be legally complex. As such, we always recommend taking advice from a qualified solicitor experienced in these matters at the earliest opportunity possible.


Am I still Bound By The Terms Of The Settlement Agreement If My Employer Breaches Them First?

If your employer has breached the terms of your employment settlement agreement you may be wondering if this renders the whole agreement void and releases you from the terms agreed.

Whether you are still bound by the terms of the settlement agreement after they have been breached by your employer will depend on the specific clause of the agreement that has been breached.

As a result, you should not act in a way that may cause you to commit a breach of settlement agreement too. If you are in any doubt as to the validity of the agreement following a breach by your employer, please consult a solicitor in the first instance.


Find Out More

We hope this article has helped you to be able to identify if you have experienced a breach of settlement agreement by your employer, what to do next if you have and how the law is on your side.

Whether your case is simple or complex, to discuss suing your employer for breach of settlement agreement or to get advice on what to do next please use contact form here or call 01744 744400 to speak to our friendly team.

Hattons Solicitors is based in St Helens, Merseyside and the firm has been providing efficient, affordable and high quality legal services to members of the public and the wider business community since 2001. Professional excellence and quality of work is reinforced by our Law Society Lexcel Accreditation, and membership to the Law Society. Our friendly team will always listen to you and your needs before working with you to deliver the approach that best meets your individual needs.

Posted on: 27/Nov/2020 Posted in: Employment Law
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