Settlement Agreements

What is a “settlement agreement” and do I need a lawyer?

A settlement agreement is a formal contract whereby you agree certain terms with your employer, usually to bring your employment to an end. Usually, your employer will offer you compensation and in return you will be expected to agree not to bring any employment–related claims against your employer.  This includes any claims in an employment tribunal or any other civil court.  Because a settlement agreement is an agreement to waive your employment rights, according to employment law it will not be enforceable unless you obtain independent legal advice on it first. 

Where do I get this advice and who pays?

In most cases, you will need to contact an employment solicitor to advise you on the agreement (unless you are already represented by a relevant trade union official).  Your employer will usually contribute towards the solicitor’s costs.  Make sure you are clear on the amount being offered by your employer.  If your solicitor’s fees exceed the contribution from your employer, you may need to pay the difference.  Your solicitor should provide you with an estimate of how much the advice will cost. 

We can normally deal with your agreement within the fee being offered by your employer, so that you don’t have to pay any extra.

Help!  My employer has given me a deadline to sign

It’s important not to delay in obtaining legal advice, but once you contact us, our lawyers can deal with your case promptly and efficiently.  We are used to dealing with settlement agreements in very limited timescales and we can work with you and your employer to ensure your agreement is concluded quickly and properly.  If appropriate, we are usually able to obtain time extensions.

My employer has offered me a “compromise agreement” – is this different?

No.  These types of agreements used to be called “compromise agreements” but since the Enterprise and Regulatory Reform Act 2013 they have been renamed “settlement agreements”.  Both refer to an agreement to end your employment in return for a waiver of your employment rights.  The same process applies to both.

Do I have to accept a settlement agreement?

No.  You should seek detailed advice from your employment solicitor on your specific circumstances.  Your adviser should advise you on your potential claims or complaints against your employer, and should advise you on whether the compensation package you are being offered is reasonable.

We will always advise you thoroughly, and objectively, on your situation.

What if I don’t agree with the terms of my settlement agreement?

If you are not happy with your compensation, you can refuse to sign the agreement, or we can try to negotiate a better compensation package on your behalf.  Our employment lawyers are experienced in negotiating favourable termination packages for clients and will advise you on your particular circumstances and what your options are.

How do I know my legal adviser is independent?

It is important that the advice you receive is independent. If your employer has recommended an employment lawyer, or the lawyer is on a list of “approved” solicitors, you should make sure you are satisfied you are receiving truly independent advice.

For advice or help with a settlement agreement, contact our employment team on 01992 300333 or email us.


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