Another potential drawback of the agreement is the limited recourse options. Once an agreement is reached, access to the injured party may be restricted. Once a settlement is reached, the aggrieved party may not be able to take further legal action against the defendant, even if additional damages result later on. This can be a disadvantage if unforeseen complications arise after the settlement and the aggrieved party cannot request additional compensation.
When faced with the potential risks and expenses associated with a case before an employment court, a settlement agreement can offer several advantages to the employer. Cost-effective resolution, confidentiality, control over results and time-saving aspects make settlement agreements an attractive alternative. However, it is also essential to consider potential disadvantages, such as increasing liquidation amounts, setting precedents, and the perception of guilt. Employers should carefully weigh these factors before deciding to seek a settlement agreement as the preferred method for resolving labor disputes.
However, for all its benefits, accepting an agreement may have some drawbacks. For example, while the agreements offer a secure promise of compensation, the amount of money received in a settlement is often less than what could have been awarded if the case had gone to trial. A possible disadvantage is that entering into negotiations to reach an agreement can demonstrate to the other party that you have no confidence in your case. However, most of the time, this is not a cause for concern, and a skilled attorney can mitigate the potential risk.
If the other party starts negotiations to reach an agreement, showing weakness is not a cause for great concern and is very valuable in keeping the negotiations going.