WITH the price of oil dipping below $50 a barrel for the first time in five years these are difficult times for employers and employees alike in Scotland – especially in the oil and gas industry.
Difficult economic decisions need to be made, and one possibility that businesses across the country might be looking at is the use of Settlement Agreements.
A settlement agreement is where an individual agrees that they will not bring an employment dispute against an employer in return for an agreed settlement payment.
The employee agrees that they will not bring any employment claim for example: unfair dismissal, discrimination or a harassment claim. In return for this, the employer will offer a settlement figure and/or agree to provide a reference to a future employer.
Settlement Agreement Legal Advice
Settlement agreements are often used in the oil and gas industry and can be beneficial to both employer and employee.
A settlement agreement can be entered into at any point in the employment relationship, however they are most frequently used to end an employment relationship in a mutually agreeable way.
It is common for a settlement agreement to be used to end an employment relationship when an employee and an employer feel the relationship is no longer working – a settlement agreement can offer a 'clean break' for both parties. This can be useful if the employer can no longer afford to keep the employee.
Both parties can agree the basis for bringing the employment relationship to an end, for example when the employment will end. This can be useful in the oil and gas industry as often certain employees are required for projects lasting a certain amount of time.
The terms of the settlement agreement will be negotiated by the employer and employee and must then be drafted into a formal offer letter. This letter will outline the details of the agreement.
In order to be binding, there are certain requirements that the agreement must adhere to, these are;
- That the agreement must be in writing;
- The agreement must also expressly state the claim or claims that the employee will not bring against the employer.
- The agreement also must include a statement outlining that the statutory provisions that dictate the legal validity of settlement agreements are satisfied
Furthermore, independent legal advice must have been given to the employee in relation to the settlement agreement.
Contact our Settlement Agreement Lawyers
If you require settlement agreement advice in the oil and gas industry, contact us on 0333 200 5927 or complete our online enquiry form.