These contracts use the laid down legislation to develop a binding agreement, which guides the employer and employee in their final period of interaction (Pozgar, 2012). This essay looks at the issues that employers and managers should consider when drafting settlement agreements with their employees in the context of a health organization.

The agreement must consider the reasons behind the termination of employees. Different reasons will affect the nature of the contract that the employer enters with the terminated employee. For example, employees who are terminated due to breach of contract cannot enter into the same contract with those who are terminated due to other factors beyond their control. Furthermore, the decision of termination is a responsibility of a qualified manager who understands the risks associated with the termination (Pozgar, 2012).

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Compensation is one of the issues that the termination agreement should consider. The employer must consider paying the employee an amount of money that will compensate him or her for the termination. This especially happens when the reasons for the termination are not due to the inconsistencies and the incapability of the employee. If the reasons for termination are market driven, then the employer must consider the fate of the employee who has nothing to do with the turn of events, which is called the unemployment compensation (Hospital Employees’ Union, 2013)

Insurance policies and taxation are other issues that the agreement should consider. Most of the workers in the health sector are insured against risks in the workplace and other risks in their lives. Therefore, the contract must consider the nature of the policies that employees had before their termination. The consideration should be as to whether the employee will continue enjoying protection or the contract will be cancelled. 

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