A Settlement Agreement, once it has been signed by both parties, is a legally binding document and can, therefore, be enforced. In the event that either party breaches the terms that were agreed upon in the document, action can then be taken against them as long as provision for this scenario has been included within the Agreement.
Employee Indemnities and Repayment Provisions
Some Settlement Agreements will include a repayment provision or employee indemnity. Should the employee then go on to breach the Settlement Agreement, the employer is in a legal position to recover any monies that they paid to them under the terms of the Settlement Agreement or refuse to make the payment should they not already have done so.
When Can a Settlement Agreement Be Enforced?
Enforcement of a Settlement Agreement can be sought if one of the Agreement’s material terms is breached. A breach would include actions such as bringing a claim against the employer after agreeing that the matter would no longer be pursued, or making a derogatory or adverse statement that damages the reputation of the other party.
Can Any Breach Result in Enforcement Action?
Settlement Agreements are not enforced if the breach is only of a minor or trivial clause. For example, if the Settlement Agreement required that the employee returned all of their employer’s property within a certain timeframe, but they subsequently failed to return a work-issued identity pass, this would not be sufficient cause to enforce the Agreement. On the other hand, if the item the employee did not return had significant monetary value, for example a laptop or car, the Settlement Agreement could then be enforced.
Will the Settlement Agreement’s Terms Still Apply?
If the employer can legally recover or withhold their compensation payment to the employee, both parties will still be bound by the Agreement’s terms. The employee, therefore, would be unable to bring a new claim against the employer.
Seeking advice from an expert legal professional is crucial in the event that a breach of contract is identified, and enforcement of the settlement Agreement is needed.
For more information or for expert advice on business or personal legal issues, contact us at info@carterbond.co.uk or visit our website www.carterbond.co.uk or call us on 020 3475 6751.
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