As we move into the new year, there have been some significant changes to settlement agreements that employers and employees alike should be aware of when it comes to both the negotiation and drafting of these important legal documents.
One major change that has come into effect in 2020 is that all settlement agreements must now include a statement highlighting the rules around confidentiality clauses. This is designed to ensure that employees are fully aware of the implications of any clauses that may prevent them from discussing the terms of the agreement with anyone else, including family members and friends.
Another significant development is that employers will now be required to provide employees with an award letter detailing the terms and value of any financial compensation that has been agreed upon as part of the settlement. This will mean that employees have a clearer understanding of the value of their settlement, helping them to make informed decisions about whether or not to accept the terms on offer.
Additionally, as part of the changes to settlement agreements in 2020, employers will no longer be able to include any clauses that might prevent an employee from making a protected disclosure. This is part of a wider push to improve protections for whistleblowers, ensuring that employees are free to report any concerns or wrongdoing without fear of retaliation.
Finally, it is worth noting that there have been some changes to the taxation of termination payments that may impact the terms of certain settlement agreements. In particular, any payments made in lieu of notice will now be subject to tax and national insurance contributions, even if they are made outside of the employee`s contractual notice period.
Overall, these changes to settlement agreements represent an important step forward for both employees and employers, ensuring that these crucial legal documents are fair and transparent for all parties involved. If you are negotiating a settlement agreement, it is important to be aware of these developments so that you can ensure that the terms of your agreement are fully compliant with the latest regulations.