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What happens if a Settlement Agreement is not Honoured?

Even after going through the whole process of entering into a settlement agreement it is possible that this may not be the end of the dispute. Either of the parties could potentially breach the terms of the settlement agreement for one reason or another.

When an employee signs a settlement agreement, they are normally agreeing not to bring an employment related claim against the employer. The settlement agreement constitutes a binding contract and thus if either side breaches any of it's terms, the other side can bring a claim through the courts.

The employer may fail to make payment of the agreed amount or refuse to give the reference they agreed to. Similarly the employee may have agreed to continue working for a certain period and leave before the end of this agreed time or breach an agreed confidentiality clause. The remedy for this will usually be an action for breach of contract that is to be raised in .the high court in England and Wales or the Sherriff court in Scotland.

Where the employee breaches

Depending on the way in which the settlement agreement is drafted, if the employee breaches the terms of the settlement agreement they may have to repay the amount paid to them by the employer. The contract may state that this will only happen if a ‘material’ term is breached and so the consequences will depend on the drafting of the settlement agreement. This is why watertight drafting is essential. Your solicitor will be best placed to ensure you get the intended outcome from your settlement agreement, and should there be a breach, they can advise you on the best way to proceed.

Where the employer breaches

If the employer does not fulfill their part of the settlement agreement, the first stage will usually be to discuss this with them. Your solicitor can do this on your behalf. If the negotiations are not successful then the employee will need to bring a breach of contract claim against the employer. An alternative option is to bring a claim against the employer at an Employment Tribunal and reinstate their original claim. However, this option is only available if the claim still falls within the very short time limits. This means that if you believe your employer has breached a settlement agreement, you must act as quickly as possible. Your solicitor will be able to advise you on the most appropriate course of action.

Employment Lawyers Edinburgh

Whether you are an employee or an employer in need of advice in relation to a settlement agreement or any other employment law issue in Edinburgh, Scotland, Employment Law Edinburgh's team of specialist Employment solicitors can help. To get in touch, you can either call us on 0131 516 7728 or complete our enquiry form.

 

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