Settlement agreement solicitors

If you are offered a settlement agreement by your employer for any reason, you will need to receive independent legal advice before signing if the agreement is to validly waive your employment claims.

We are highly experienced, dealing with hundreds of settlement agreements each year. We are efficient in reviewing and advising on settlement agreements, providing practical independent legal advice.

What are settlement agreements and why do employers offer them?

Employers may offer a settlement agreement to bring the employment relationship to an agreed end and reduce the risk of employment-related claims. By entering into a settlement agreement (or compromise agreement as they used to be called) employees agree to waive (give up) specified employment-related claims, such as unfair dismissal and unfair selection for redundancy, in return for the benefits agreed under the settlement agreement.

How much compensation is typical?

Employees can generally expect some form of financial payment or other benefit as part of a settlement agreement, although the amount varies considerably. There is no standard amount of compensation. The value will depend on factors such as the circumstances surrounding your departure, the strength of any potential claims, your contractual entitlements and the employer's appetite to settle.

Compensation may be paid in addition to contractual payments such as salary or notice pay, accrued holiday and any other sums already due to you.

Why do employers need legal advice?

The employer has to ensure, to comply with the statutory requirements for a valid settlement agreement, that you have taken independent advice from someone who is independent of the employer and authorised to provide the advice required.

We can provide this independent legal advice and explain the agreement to you in straightforward terms.

If your employer is paying for the independent legal review of your settlement agreement, we do not charge you for the advice.

How will legal advice on a settlement agreement help?

Our review covers the terms of the agreement and discussing any potential claims that you may have which are being waived under it. Being independent, we do not act for your employer. Discussions with you are confidential.

Sometimes clients want to try negotiating a better compensation package. We will advise on whether there is scope to negotiate and whether we consider this to be worthwhile. Where appropriate, we negotiate for clients.

We also offer expertise in related areas such as post-termination restrictions and your position under share schemes. Any additional work outside the settlement agreement review may be chargeable. We will explain what is required and the likely cost before incurring additional fees.

Settlement agreements are final

There is generally no going back once you have signed your settlement agreement. The settlement agreement provides for full and final settlement of the specified claims against the employer and any sums due to the employee. You therefore need to make sure you understand what you are agreeing to before you sign your settlement agreement.  There is no "cooling off" period after signing.

Get in touch

Settlement agreement compensation

Compensation offered under a settlement agreement is usually made up of several elements, including:

• Your contractual entitlements - such as notice pay, accrued holiday, bonuses and other sums already due under your employment contract;
• Redundancy pay (if applicable); and
• Compensation for loss of employment or directorship – this is where there may be greater scope for negotiation.

Certain termination payments can benefit from the £30,000 tax exemption, subject to the relevant tax rules and conditions. Not all payments made under a settlement agreement will qualify for this treatment.

It is not easy being presented with a settlement agreement and most people are unsure of their position until they have spoken to us.  Our review will put your mind at rest.