The Pre Settlement Agreement is a crucial preliminary document in England and Wales, used when parties are negotiating the termination of employment. It serves as a framework for discussions before entering into a legally binding Settlement Agreement. This document is particularly valuable when managing sensitive exits, restructuring, or resolving workplace disputes. The Pre Settlement Agreement typically includes proposed financial terms, confidentiality provisions, and other key terms while maintaining 'without prejudice' status to protect both parties during negotiations.
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1. Parties: Details of employer and employee
2. Background: Context of employment and circumstances leading to settlement
3. Definitions: Key terms used throughout the agreement
4. Settlement Terms: Core financial and practical terms of settlement
5. Confidentiality: Terms regarding non-disclosure of agreement and its terms
6. Tax Indemnity: Employee's responsibility for tax on settlement payments
1. Reference Provision: Terms regarding future employment references - include when agreed as part of settlement package
2. Post-termination Restrictions: Non-compete and other restrictive covenants - include when existing restrictions are being varied or new ones added
3. Legal Costs: Contribution to employee's legal fees - include when employer agrees to contribute to legal costs
4. Outplacement Support: Terms of career transition assistance - include when outplacement services are part of package
1. Schedule 1: Claims: List of statutory and contractual claims being settled
2. Schedule 2: Payment Terms: Detailed breakdown of settlement payments
3. Appendix 1: Adviser's Certificate: Independent legal adviser's confirmation of advice given
4. Appendix 2: Reference Template: Agreed form of reference where applicable
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