Employment settlement agreements are legally binding contracts that can be used to terminate the employment relationship on agreed terms.
Formerly known as compromise agreements, employment settlement agreements are a written legal agreement between the employee and his employer, under which the employee agrees to establish an employment court that he or she has, or potentially has, an agreement against his or her employer.
Employers and employees enter into an employment settlement agreement where the employer pays the employee a sum of compensation and the employee waives his or her right to bring a claim to the court or terminates any proceedings that have commenced.