Breaching a settlement agreement, whether as an employer or an employee, can lead to legal consequences such as withheld payments or claims for damages. It is important to understand and fulfil your obligations as outlined in the agreement.
When is the settlement agreement breached?
A settlement agreement can be breached by eithertje employer or employee if they don’t do what they promised in the agreement.
For example, one important promise an employer makes is to pay the agreed amount of money on time. If they miss that deadline, they have broken and breached the agreement.
Breach of the settlement agreement by an employee
One responsibility of the employee is to keep the payment details under the agreement private. If they share this information, they have broken the agreement.
What happens if an employee breaches the agreement?
The most common outcome when an employee breaches the agreement is that the employer withholds some, or all, of the termination payment.
This could happen, for example, if the employer thinks the employee has shared confidential information or made negative comments that go against the agreement.
In this case, the employer’s advisors will likely reach out to the employee or their advisor to ask for an explanation about the breach. While waiting for this explanation, the employer might hold back some or all of the termination payment. If the employee doesn’t provide a good enough explanation, the employer may take legal action against them for any damages caused by the breach.
What happens if an employer doesn’t pay the amounts owed in a settlement agreement?
As mentioned earlier, an employer can break the agreement by not paying the settlement amount on time or by sharing confidential information about the agreement.
In either case, the employee can file a claim for breaking the contract in either the County Court or High Court. If the claim is for more than £10,000, the employee can also get back their legal costs if they win.
Additionally, if certain people at the company talk about the agreement or what happened before it was signed after it’s been signed, that could also break the confidentiality promise in the agreement.
It is essential for individuals to take settlement agreement advice uk to make sure they understand the wording. This helps protect them from any potential problems that could come up if their employer shares details about what happened before the agreement was made.
Breach of settlement agreement contract
If an employer allows or encourages sharing information about the agreement, it can lead to legal issues. The employee may have grounds to file a claim for breaking the contract and for defamation.That’s why employees should carefully consider the promises they make to the employer.
They should also think about what the employer promises them regarding confidentiality and not making negative statements.
Post-termination restrictions breach
If there is a breach of post-termination restrictions within the settlement agreement then the employer has the right to pursue a claim in the High Court. This claim could be for an injunction preventing the individual from carrying out certain activities for example taking up new employment with a particular employer.
In addition, an employer may make an application to the court for an ‘account of profits’ if it is suspected that the individual’s actions give rise to losses incurred by the employer and/or damages to compensate the employer for those losses it has incurred.
Summary
In conclusion, breaching a settlement agreement can have serious consequences, whether you’re an employer or an employee. It’s crucial to understand the terms of the agreement and to fulfil your obligations to avoid potential legal action.
If you’re unsure about any aspect of a settlement agreement, it’s always a good idea to seek legal advice. Remember, a settlement agreement is more than just a document—it’s a commitment that requires understanding and respect from both parties involved.
Contact us today for expert settlement agreement advice
Our experienced settlement agreement solicitors can help you navigate the complexities ensuring you know what to expect and how to protect your interests. Whether you need assistance with understanding the terms, addressing potential breaches, or pursuing claims, we’re here to support you every step of the way.
With over 10 years of experience in employment law matters, David Philip Harris specialises in providing legal advice on settlement agreements to both employees and employers throughout the UK. David’s opinion and advice are frequently sought after as he contributes often to BBC Radio Berkshire and the People Management Magazine. David Is a long-standing member of The Employment Lawyers Association and The Law Society.