Chapter NMWM05370
Published date | 16 April 2016 |
Record Number | NMWM05370 |
Court | HM Revenue & Customs |
The legislation that applies to this page is as follows:
- National Minimum Wage Act 1998, section 49
A settlement agreement (formerly compromise agreement) is a restrictive covenant which restricts the conduct or activities between parties. The most common use is to agree the actions of an employee after termination of employment and usually involves a financial settlement being made to the employee.
The conditions required to make such a settlement agreement valid are;
- It must be in writing
- It must specifically relate to the circumstances of the parties
- The worker must have received advice from a “relevant independent adviser” as to the terms and effect of the agreement and its effect on the ability of the worker to take a case before an employment tribunal (industrial tribunal in Northern Ireland)
- The adviser must be identified in the agreement and have suitable insurance or professional indemnity to cover the risk of a claim by a worker in respect of losses caused as a consequence of the advice provided
- The agreement must state the conditions of section 49 of the Act are satisfied.
The Act defines a “relevant independent adviser” as someone who;
- is a qualified lawyer who is not engaged by the employer
- is an officer, official, employee or member of an independent trade union who is not the employer. The person must be certified in writing by the...
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