What is reaffirmation of a settlement agreement?
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Reaffirmation of a settlement agreement is signing a second time.
A reaffirmation of a settlement agreement is where the employee is required to sign a settlement agreement twice, or to sign a first/main settlement agreement then a reaffirmation or second settlement agreement. It usually happens where there is a long gap between agreeing terms of a settlement agreement and the end of the employee’s employment.
Why do you have to sign a reaffirmation?
You can only waive employment claims up to the point you sign a settlement agreement. Having said that, there are usually clauses in a settlement agreement that say you’re giving up all claims, now and in the future. We’ll park the question whether those are enforceable – no one ever really wants to find out the hard way.
The point is that the employer will want the employee to have validly given up all their potential employment claims, right up to the termination of their employment. There are good reasons for this – you want to know that there’s no chance that the employee can get round the settlement agreement to bring a claim despite the deal you’ve reached.
When do you need to sign a reaffirmation of a settlement agreement?
Reaffirmation is important for employers where the employee is going to remain employed for some time after signing the settlement agreement. For instance, perhaps they are going to finish a project before leaving, or they’re going to work for their notice period, or are being put on garden leave. Employers will want to require the employee to continue complying with their contract of employment during the intervening period, and often will specifically say that they can still dismiss if the employee commits gross misconduct. On the employee’s side, they may want to get agreement that their restrictive covenants will be reduced by any time spent on garden leave.
It’s important to get the settlement agreement terms finalised at the outset, before letting the employee start garden leave or starting their notice running, so that everything is signed up and agreed. But what about claims that arise during that period between signing up to the settlement agreement and the eventual termination of employment?
Requiring the employee to sign a reaffirmation (or a second settlement agreement) at or just after termination tidies things up, in that they are then waiving all claims right up to termination.
The reaffirmation requires advice from a qualified lawyer.
Do I need legal advice for a settlement agreement or reaffirmation?
Yes. Settlement agreements are only valid if they comply with various requirements, including the requirement that the employee has had independent legal advice from a suitably qualified individual (usually a solicitor, though certain other individuals can give the advice).
A reaffirmation (or second settlement agreement) is just as much a settlement agreement as the first one, and employees must also get independent legal advice on the reaffirmation before signing it. Usually, employers will pay the additional fees that would be incurred by having to go back to the solicitor at termination – or should at least be asked to do so, given that it’s ultimately for the employer’s benefit that the settlement agreement is valid.
Settlement Agreement legal advice
We can give independent, pragmatic legal advice on the terms of your settlement agreement. Our fees start at £500 plus VAT, which we think is pretty reasonable for the service we provide. We will always go through the whole agreement with you and talk about whether you’re happy with the payments to be made, and the other terms (such as confidentiality, restrictive covenants, and terms about your future employment). We don’t just advise on what the agreement says without considering whether amendments are appropriate.
With our fees starting at the above rate, we’ll usually be able to stick to your employer’s contribution to fees. If their contribution is unreasonably low, we’ll always try to get them to increase rather than ask you to pay.
If you need independent legal advice on a settlement agreement, then do reach out to our expert solicitors. You can leave a comment below, email email@example.com or call 03300 020 863.
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