Settlement Agreements

A Settlement Agreement is a legally binding agreement between an employer and an employee which both parties enter into voluntarily in order to resolve a dispute between them and/or end the employment contract on agreed terms. In return for an agreed settlement package (which usually includes a tax free lump sum), the employee agrees not to pursue their case  against their employer to an Employment Tribunal or the civil courts. To be valid, a settlement agreement must comply with the following requirements:-

• The agreement must be in writing.
• The nature of the dispute being settled must be specified within the agreement.
• The agreement must include a statement confirming that the conditions governing settlement agreements have been complied with.
• The employee must have received independent legal advice on the settlement agreement. This must be from a person who is qualified and insured to provide it, such as their solicitor. The settlement agreement must also identify who that person was. The employer pays the costs involved for the employee taking this advice.

It will cost you absolutely nothing to obtain the advice required on your settlement agreement from us. This is because your employer will pay the costs for you. Your employer usually agrees to pay the legal costs up to a certain amount, and that is normally sufficient to cover our costs. Indeed, we guarantee not to charge you more than what your employer has agreed to pay. That is, we guarantee that you will not have to pay anything yourself personally. We are able to offer this guarantee, as we are able to adapt and tailor our service to the budget provided by your employer. Hence, in sum, the costs for advising on a settlement agreement for you personally when we take on your case, is zero.

The standard terms within a settlement agreements are as follows:-

• A lump sum payment to be made to the employee as compensation for loss of office
• The Employee agrees not to pursue a claim/legal proceedings against the employer in the Employment Tribunal or in the civil courts
• A statement that the first £30,000.00 of the lump sum payment by way of compensation for loss of office can be paid tax free, but that the employee provides a tax indemnity to the employer in respect of any tax due
• That there will be confidentiality in relation to trade secrets, the existence of the Settlement Agreement, and the terms and conditions of the Settlement Agreement
• No derogatory remarks by either party in relation to the other
• That the employer will provide an agreed reference for the employee to prospective future employers, a copy of the agreed wording of which is annexed to the Settlement Agreement
• The position on post termination restrictive covenants is often set out
• Return of employers property by employee
• Confirmation that the employee has received independent legal advice

We can usually arrange appointments at very short notice, usually for the same day, and we are normally able to conclude the work required on the settlement agreement extremely quickly

Please either call us on 0333 301 0700 or complete the contact form below.

Each of our office location pages provide you with the address of the office, directions on how to locate the office, and details on the geographic area covered by each office

Yes. All of our settlement agreement advisers are fully qualified solicitors who are members of both the Law Society and of the Employment Lawyers Association, and have years of experience in advising upon settlement agreements

In addition to providing you with the independent legal advice upon your settlement agreement, we are also able to broker / negotiate any changes that are required on the settlement agreement in terms of amendments directly with your employer on your behalf.  That is, we do not charge you anything extra for negotiating any amendments that are required on the settlement agreement over and above what your employer is paying us for dealing with the settlement agreement.  The reason for this is, is that the legal costs that your employer will be paying us will be treated by us as a fixed fee that will apply regardless of how much work is involved to conclude the settlement agreement.

Moreover, in terms of brokering / negotiating amendments with your employer to the settlement agreement, this includes seeking an increase in the financial package that your employer is offering you within the settlement agreement, where it is determined that the financial package is insufficient.

Further, when advising you upon your settlement agreement, we don’t just confine the advice to the terms of the settlement agreement and the merits of the offer contained within it. We look at all options available to you, including taking your employer to an employment tribunal in the event that the settlement agreement does not represent a reasonable proposal, and your employer refuses to improve upon it

Most Settlement Agreements include provisions for an agreed reference, and we will look to ensure that this is included and appropriately worded to support your future employment prospects