Are separate copies of documents OK in settlement agreements?

Q: HR Manager question: is it OK if an employee signs a Settlement Agreement at work and his adviser separately emails a copy of the legal adviser’s certificate?

Helen Brooks, Partner at Doyle Clayton answers…

Helen Brooks, Partner at Doyle Clayton.

Any agreement to settle or waive statutory employment claims (such as unfair dismissal, discrimination etc) will be void unless it is either agreed through ACAS or recorded in a Settlement Agreement that complies with certain statutory requirements.

The statutory requirements (prescribed in Section 203(3) Employment Rights Act 1996) are as follows:

  • The agreement must be in writing;
  • The agreement must relate to a particular complaint or particular proceeding;
  • The employee must have received independent legal advice from a relevant independent adviser on the terms and effect of the proposed agreement and its effect on the employee’s ability to pursue any rights before an Employment Tribunal;
  • The independent adviser must have a current contract of insurance, or professional indemnity insurance, covering the risk of a claim against them by the employee in respect of the advice;
  • The agreement must identify the adviser; and
  • The agreement must state that the conditions regulating Settlement Agreements under the relevant statutory provisions have been satisfied.

Statutory conditions

It is interesting to note that there is no statutory requirement for the adviser to sign any confirmatory letter or certificate.  It is common practice, however, for employers to require, as a condition of the Settlement Agreement, that the employee’s adviser sign a certificate to confirm that they meet the criteria for a relevant independent adviser under the legislation and have given the necessary advice.

This is because it is the employer who is the most at risk if the statutory conditions are not satisfied because the waiver of statutory claims will not be effective.  As well as giving comfort that the legal advice requirements have been satisfied, a certificate will give an added layer of protection for the employer in the form of a potential remedy for misrepresentation or negligent misstatement if the content of the certificate turns out not to be true.

Independent advice

There is no statutory requirement that signature or execution of the Settlement Agreement take place in a certain way or, for example, that the employee signs the agreement in the presence of the adviser.  However, it is a requirement that the employee “has received” independent advice and so HR managers should be wary of a situation where the employee signs the Settlement Agreement before they have sought advice from the independent adviser.

The requirement to name the adviser in the Settlement Agreement means this scenario is less likely to occur and assuming the adviser has been engaged and the requisite advice sought and received by the employee (and there is no express requirement to the contrary in the Agreement itself), there is no reason why he or she should not sign a Settlement Agreement at work and for their adviser to send on the signed certificate separately by email.

Payment obligations

It is common for the agreement to make it clear that any payment obligations falling on the employer will not be triggered until the employer is in receipt of both the employee’s signature and the signed adviser’s certificate.  No payments should be processed (or authorised) therefore, until valid execution in accordance with the requirements specified in the Agreement has taken place.

It is also good practice to request that hard copies of any signed signature pages and/or the signed adviser’s certificate be sent separately by post, following initial transmission of electronic copies by email.  The hard copy should be kept on file with the agreement, once it has been signed by both parties.  It is common also for the agreement to be executed in duplicate and for one original copy (signed by both the employer and the employee) to be returned to the employee or to their adviser.

Employment Solicitor


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