Dispute Prevention Through Revision of a Recommended Resignation Settlement Agreement

In the course of restructuring its organization, the client needed to adjust part of its workforce and sought to carry this out through recommended resignation (voluntary separation). However, the settlement agreement template the client had been using did not adequately reflect core elements such as confirmation of the intent to resign, the scope of settlement, and the legality of the procedure, raising the possibility of future disputes over wrongful dismissal or unpaid amounts. Accordingly, the client requested the preparation of a concise and safe standard settlement agreement that could be used repeatedly.

First, Your Legal Team revamped the agreement into a structure that clearly confirms voluntary intent, thereby reducing the likelihood of any claim that the resignation had been coerced. Second, we ensured that attendance status, remaining annual leave, and the scope of settlement were clearly stated, preventing misunderstandings regarding wages and allowances before and after departure. Third, to prevent future disputes, we set a covenant not to sue within a reasonable, non-excessive scope, and reasonably stipulated only basic post-employment obligations such as the protection of trade secrets, completing a balanced document. Overall, we simplified the structure and adjusted the wording with realistic language so that the rights and obligations of both the company and the employee would be clearly set out.

Using the revamped standard settlement agreement, the client carried out its workforce adjustment procedures stably, and concerns over unnecessary disputes during the negotiation process were reduced. As the items of the settlement agreement became clearer, the HR operations department was also able to handle its work according to unified standards, and a foundation was laid for applying the same risk-management framework whenever recommended resignation becomes necessary in future organizational operations. This case demonstrates that a resignation settlement agreement is not a mere document but a key device for preventing disputes, and confirms the importance of preparing a systematic and balanced template.