Employment Solicitors

Settlement Agreements

What are settlement agreements and how do they work?

A Settlement Agreement (previously called a Compromise Agreement) is a document an employer may ask an employee to sign, under which they will give up their rights to bring certain claims against it in relation to their employment or its termination. 

As an employer, how and when do you use a Settlement Agreement to terminate the employment of one of your staff?

What should an employee do if given a Settlement Agreement to sign by your employer?

Our team of specialist employment solicitors regularly advise both employees and employers on these issues.

Please contact one of the team for more information or to discuss your requirements.

The team is incredibly user friendly, pragmatic and supportive in its approach

Chambers and Partners

Settlement Agreements

Here are some resources to help employees and employers understand more about Settlement Agreements and how to do deal with them. Please contact a member of our team if you would like any further information.

What is a Settlement Agreement ?

A settlement agreement is a written agreement in which an employee or ex-employee agrees not to make a claim against their employer, usually in return for a financial settlement. They are typically used to resolve disputes, or at the termination of employment to head off any subsequent claims against the employer.

Because a settlement agreement means that you are waiving your statutory rights, such as the right to claim unfair dismissal or discrimination, you are required to seek legal advice on its contents. Usually your employer will contribute towards any legal fees you incur in seeking such advice.

We will advise you on the terms of the agreement to ensure that it is drafted in your best interests, including whether you are receiving your full entitlement to notice pay and other final payments and benefits. We will also assess the merits and potential award of any potential tribunal claims to establish whether a settlement agreement really is your best option. We can also be involved in negotiations to increase the financial offer or simply advise you on the terms before you sign the agreement.

Settlement Agreement Q&As for employees

We recently prepared a blog post which goes through some of the questions we are regularly asked.

Settlement Agreement Top Tips for individuals

Our team have prepared a useful guide with some top tips on what you should do if your employer hands you a settlement agreement

Settlement Agreement Top Tips for businesses

Our team have prepared a useful guide with some top tips on how and when you as an employer can or should use settlement agreements

Multiple Settlement Agreements for employers and trade unions

You may be an employer planning a number of dismissals perhaps due to a restructuring or redundancy exercise, with several employees requiring advice on settlement agreements.  Or you may be a trade union with a number of members requiring advice on settlement agreements at short notice.  We can help by advising all the affected employees on their settlement agreements.

  • We will save you the time and costs of dealing with multiple legal advisers by providing the required independent legal advice to all affected employees on their settlement agreements.  
  • Whilst employees are obviously free to choose which solicitor advises them, group settlement agreements are a convenient and less stressful solution for those unfamiliar with having to seek out and visit a solicitor in an already difficult situation.
  • If more convenient, we will come to your chosen venue.  
  • Our team of specialist solicitors are all experienced in advising on settlement agreements, often at very short notice.

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