The term settlement is used to designate a type of legal and labor document that applies in cases in which an employment relationship between employee and employer must be terminated for various reasons. As with all aspects of relationships and work activities, the type of bond established between both parties, as well as the duties and rights of each one, must be properly clarified in documents. The settlement is a very important one since it is the one that puts the work done by a person in perspective and contains the necessary information for when the employment relationship must be finalized.
The name of settlement comes from the verb to settle, which means to finish or end something. Although this verb can be used in many different situations, it serves to give the exact idea of what type of document the settlement will be. As its name says then, the settlement is the paper or legal document that is established between the two parties that made up the employment relationship until that moment: the employee and the employer. In this way, the information can be sorted and clarified through it.
The settlement has several parts. First of all, you must have the personal data of the people involved in the balance sheet. It could be said that each settlement is the unique document of a person and that it cannot be shared with others; it is a kind of balance or final file of the individual in question. The settlement, after clarifying data such as names, identification numbers, start and end dates of that relationship, etc., should clarify two main elements: how much is owed to the employee at the time of termination of the employment relationship and how much should be deducted of that amount for different reasons. Thus, the settlement can clarify, for example, that the employee is owed three days of vacation but also that one of those days will be subtracted because the employee was absent once without justification. Finally, the settlement must include the final balance of such balances and the signature of both parties that implies the common agreement on it.
