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When would a settlement agreement be offered?

A settlement agreement can be offered by an employer or an employee. Neither side has to offer. Neither side has to accept. It is when it is beneficial to both that a deal may be done.

Employers like them because if they have done something wrong, are planning something wrong or if they don’t know if it is right or wrong (because employment law and employee relations are complex), it can get them out of a tricky situation. Even where an employer has done nothing wrong, a low commercially sensible settlement may be preferable to the management time and legal costs lost to an Employment Tribunal claim.

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