In most cases the benefit of a settlement agreement for you is the payment of an enhanced sum of money to help you to move on from your role – a financial cushion from which you can look for a new job.
A settlement usually signifies a clean break, and will often be preferable to the alternative of pursuing lengthy and potentially costly and uncertain employment tribunal proceedings.
You might be worried about your reputation or how your departure will be communicated to colleagues.
A settlement agreement can include beneficial terms to like an agreed reference or announcement to put your mind at rest.
The key benefit for an employer is certainty, and the knowledge that you won’t be able to pursue a dispute through the courts or tribunals.
An employer can also obtain the benefit of provisions around confidentiality, and reputation of the business (via clauses that the parties must not make derogatory comments about one another), certainty over return of company property, and restrictive covenants.