Employment Settlement Agreements

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If you have been offered a Settlement Agreement by your employer, you must get independent legal advice. Otherwise, it’s not valid.

Our Employment Solicitors can review the terms of the proposed Settlement Agreement and advise you in relation to any potential claims you may have against your employer.

You may feel that your proposed termination payment is insufficient, particularly in light of any claims you may have. If this is the case, we may be able to obtain a better deal for you.

Settlement Agreements often include complicated terms and conditions. We can explain everything to you in plain English, ensuring you understand the implications of signing the agreement.

We’re always transparent and upfront about our legal fees, which we’ll discuss with you at the start to avoid any surprises.

On Settlement Agreements, employers usually make a contribution to your legal fees, which may be sufficient to cover our legal fees. In more complicated cases, where we’re asked to carry out extensive negotiations to secure a better settlement package, we may seek a higher contribution from the employer.

Any additional charges will be discussed with you in advance.

We offer a reliable and prompt service, ensuring we're available when you want to speak to us, even outside normal office hours.

For a free assessment of your case get in touch with our Employment Solicitors.

Call us on 08002605010 or request a callback and we will help you.

What is a Settlement Agreement?

An employment Settlement Agreement is a legally binding contract between an employer (or former employer) and an employee. It prevents an employee from bringing claims against an employer. In return, the employee is usually offered a termination payment as an incentive to sign the Settlement Agreement.

Settlement Agreements are typically used when an employer wants to terminate an employee’s contract of employment and is concerned this may lead to a legal dispute. For example, the termination of employment could amount to Unfair Dismissal, constructive dismissal or a Discrimination at Work claim.

Terms of a Settlement Agreement

At its simplest level, a Settlement Agreement involves receiving a sum of money in exchange for signing away (or compromising) any claims you may have against your employer. The list of claims you can’t bring are usually very extensive, although there can be some exclusions. For instance, claims in relation to pension rights and personal injury claims you are unaware of are the types of claims that you could still bring against your employer even though you have entered into a Settlement Agreement.  

However, you do not have to accept the proposed terms. If you do not think the Settlement Agreement offer is fair, you can negotiate a better deal. These discussions usually take place on a ‘without prejudice’ basis, meaning they cannot later be raised in an Employment Tribunal or in Court.

Settlement Agreements typically contain confidentiality clauses. This prevents you from discussing the terms of the agreement with anyone else, such as former colleagues. It is also standard for employers to insert a clause, asking you to refrain from ‘bad mouthing’ your employer after your termination date.

Why Do I Need a Solicitor?

If you are offered a Settlement Agreement, you should speak to an Employment Solicitor as soon as possible for a number of reasons.

Firstly, a Settlement Agreement is only legally binding once you have sought independent legal advice. This means you actually have to speak to a Solicitor before accepting the agreement.

Secondly, you only have one opportunity to get a Settlement Agreement right. Once the Settlement Agreement is signed by both parties, it becomes biding. This means that is usually not possible to make any further amendments to the agreement, unless this is agreed in writing between the parties. Therefore, you should try to ensure the agreement is fair and reasonable.

An Employment Solicitor can review the proposed agreement and advise whether it meets your best interests. If not, without prejudice negotiations can be entered into. It can be hard to do this without legal support, as you may not have a full understanding of the law.

Lastly, an Employment Solicitor can explain what consequences the Settlement Agreement could have. For instance, you may have to pay tax on lump sum payments and payments made in lieu of notice (PILON).

David Hession has renewed my faith in legal services over the last few months. If this is a reflection of the company overall then I would be very happy to recommend Simpson Millar to anyone particularly David. 

My situation regarding a matter of employment law was very stressful and upsetting. The care, empathy and professionalism that David showed was consistent and remarkable. There was never a moment that I had to chase him up, or doubt his dedication.

Unlike many many other solicitors, he kept me immediately informed and up to date on a case that lasted many tiring months. Eventually leading to success that restored my faith and dignity. I am so grateful to him. As a single mother in a crisis, he was a really welcome professional support, understanding my case fully and acting in an exemplary manner. R. Thomas, client

Our Approach

If your employer has offered you a Settlement Agreement, our Employment Solicitors can help you.

We can advise if the Settlement Agreement is fair and whether there are any other issues that need consideration. What happens next depends entirely on you. You might want the matter resolved quickly and amicably, or you might want one of our Employment Solicitors to negotiate with your employer. We will be guided by you.

If Settlement Agreement negotiations are called for, we can revert back to your employer, requesting that the terms of the agreement are amended. In some circumstances, this can result in you getting a much better offer of compensation. If a robust stance is needed, we can raise a grievance or pursue a claim at an Employment Tribunal. We understand however that not all of our clients want to take this approach.              

If a suitable Settlement Agreement is drawn up, we can advise on any tax implications. This ensures that any tax or National Insurance deductions are applied in the correct manner. It also reduces the risk that HM Revenue & Customs will seek to recover further tax at a later date.

Settlement Agreement Solicitors

At Simpson Millar our Employment Solicitors specialise in Settlement Agreements and can:

  • Help you to get a financial deal that works for you
  • Advise on settlement agreement wording that is more employee friendly
  • Negotiate the wording of an employment reference
  • Advise on whether you may have any claims against your employer.

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