A settlement agreement (previously known as a compromise agreement) is a legally enforceable contract between an employee and an employer that you enter voluntarily.
Settlement agreements can be utilised in a variety of situations including or potentially involving a conflict between an employer and an employee or ex-employee, such as:
- To resolve real or future workplace issues if there has been a dismissal
- To resolve actual or potential workplace conflicts following a dismissal
- To ensure a clean break for redundancies where an employee receives an improved redundancy payment but the company or employee still want to discontinue employment.