Short Settlement Agreement Template for England and Wales

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Key Requirements PROMPT example:

Short Settlement Agreement

"I need a Short Settlement Agreement for a senior software developer who is leaving the company on 15 March 2025, with a settlement payment of £50,000 and an agreed reference to be provided."

Document background
A Short Settlement Agreement is used when parties wish to resolve employment-related disputes efficiently under English and Welsh law. This streamlined document maintains all essential legal requirements while reducing complexity and length. It's particularly useful for straightforward settlements where both parties seek quick resolution. The agreement must comply with UK employment legislation, including the Employment Rights Act 1996 and Equality Act 2010, and requires independent legal advice to be valid. It typically includes settlement terms, confidentiality provisions, and tax arrangements.
Suggested Sections

1. Parties: Identification of the parties entering into the agreement

2. Background: Brief context of the dispute or circumstances leading to settlement

3. Definitions: Key terms used throughout the agreement

4. Settlement Terms: Core settlement provisions including payment terms

5. Tax Indemnity: Provisions regarding tax treatment of settlement payment

6. Confidentiality: Obligations regarding confidentiality of the agreement and its terms

7. Legal Advice: Confirmation of independent legal advice received

Optional Sections

1. Reference Provision: Terms regarding future employment references - used when settlement relates to employment matters

2. Non-Disparagement: Mutual obligations not to make derogatory statements - used when reputation protection is important

3. Return of Property: Provisions for returning company property - used when settlement relates to employment matters

Suggested Schedules

1. Schedule 1 - Claims: List of specific claims being settled

2. Schedule 2 - Adviser's Certificate: Independent legal adviser's confirmation

3. Schedule 3 - Agreed Reference: Format of agreed employment reference 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

Relevant Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing employment rights in England and Wales, particularly Section 203 which sets out requirements for valid settlement agreements

Equality Act 2010: Legislation protecting against discrimination and promoting equality, crucial for ensuring settlement terms don't discriminate unlawfully

Companies Act 2006: Relevant for corporate aspects of settlements, particularly when dealing with director settlements or company obligations

Trade Union and Labour Relations (Consolidation) Act 1992: Governs collective labor relations and can impact settlement terms where union involvement exists

Protection from Harassment Act 1997: Relevant for settlements involving workplace harassment claims or allegations

Limitation Act 1980: Sets out time limits for bringing different types of claims, important for understanding which claims are being settled

UK General Data Protection Regulation: Governs the processing and handling of personal data in settlement agreements, including confidentiality clauses

Data Protection Act 2018: UK's implementation of data protection requirements, relevant for handling personal information in settlements

Income Tax (Earnings and Pensions) Act 2003: Governs taxation of settlement payments and determines tax treatment of different payment elements

Taxes Management Act 1970: Relevant for tax administration aspects of settlement payments

Working Time Regulations 1998: May be relevant if settlement involves claims related to working hours or holiday pay

National Minimum Wage Act 1998: Relevant if settlement includes wage-related claims or payments

Pensions Act 2008: Important for settlements involving pension rights or pension-related claims

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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