Settlement agreement

A Settlement Agreement between employer and employee is a legally binding settlement usually offered shortly before or after the termination of employment. These used to be known as Compromise Agreements. You will be required to waive your right to bring legal claims such as unfair dismissal or workplace discrimination in return for an agreed sum of compensation.

If you have been offered a Settlement Agreement, your employer has to make sure you receive independent legal advice before signing, otherwise the agreement will not be enforceable. The reason behind this is to ensure you fully understand the implications of entering into this agreement.

Your Settlement Agreement may be a positive step forward for you.

We always take the time to listen to you to find out the background to the offering of this Settlement Agreement in order to properly advise you as to whether it is in your best interests to sign. In certain cases we may be able to negotiate a larger sum of compensation and/or better terms including a positive reference, which sometimes can be better than the compensation.

Alternatively, we may advise that you would obtain a much better settlement by lodging or continuing with a grievance, capability or disciplinary process or even commencing Employment Tribunal proceedings.

Your employer should have included a clause in the Settlement Agreement which sets out a fixed contribution towards the cost of you obtaining independent legal advice. In straightforward cases, this contribution should be enough to cover all of your legal costs. If it is not, because your Settlement Agreement needs amendments, then we would always return to your employer to ask for a higher contribution.

If you are considering signing a Settlement Agreement please contact us. We are more than happy to have a free initial chat with you to point you in the right direction. The contribution provided by your employer will ensure that we are able to fully assess your situation.

We recognise that it is always your decision as to whether you sign or not. Our written advice will mean you are able to make an informed decision about how you wish to proceed.