Celine Dion -- Buries the Hatchet With Disgruntled Ex-Employee

Celine Dion and her ex-handyman -- the one who claimed she bilked him out of years worth of overtime -- have finally come to an agreement and settled their beef out of court.

TMZ broke the story ... Keith Sturtevant sued Celine and her husband in June, claiming the couple never paid him a dime in overtime for all the work he did as their "warehouse manager"/handyman. He says they wormed out of it by illegally classifying him as an "exempt employee."

Celine and her husband fired back ... claiming Keith was paid a "handsome yearly salary" which covered all overtime. They also said when they let him go, they offered him a $10,000 severance package with vacation -- which he refused.

But the two parties finally settled the matter out of court and the suit was dismissed on August 30.