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Do you need help with a Settlement Agreement?

See our FAQs below:



What is a Settlement Agreement?

A Settlement Agreement (formerly known as a Compromise Agreement) is a legally binding contract and agreement between you and your employer which sets out mutually agreed terms and conditions for ending your employment so that you and your employer can go your separate ways amicably.  Typically you will receive a payment in return for giving up your rights to bring any claim against your employer in a Tribunal or Court.


Why do I need to speak to a Solicitor?

For an Agreement to be valid and legally binding, an employee must receive independent legal advice.  A specialist employment solicitor will be able to provide advice on the merits of your claim and the amount of money that you would likely receive at an Employment Tribunal.  The document itself can be bewildering and full of legal jargon so you will be provided with guidance and support and make sure that you have been offered what is fair to you and your interests.


For what reason would an employer use a Settlement Agreement?

There are a range of reasons why an employer will offer a Settlement Agreement when they wish to terminate a contract on mutually agreed terms.   The most common reasons are where the employer does not want to follow what could be a long process of either a performance review or a full redundancy process before being able to terminate your employment.  It is also useful where you already have issues about discrimination or have raised a grievance, and your employer may want to circumvent a claim for constructive dismissal and/or discrimination.


What sort of issues will a Settlement Agreement deal with?

The Agreement will cover issues such as payments due, notice payment (if this is not to be worked), Pension, and any due bonuses or commission. 


Will my employer still provide a Reference?

Where they has been a dispute with your employer, it is a good idea to ask that an agreed reference is attached to the Settlement Agreement with a clause that the employer cannot derogate from this agreed reference.



Will I have to pay the legal fees for a Solicitor to assist with a Settlement Agreement?

Your employer would usually pay a contribution towards your legal fees which typically range between £350 and £500 (plus VAT) depending on the complexity of the issues included.


How long do I have to consider a Settlement Agreement?

ACAS guidance indicates that your employer should provide you a minimum of 10 days.  This is deemed as a reasonable length of time to consider your Agreement and obtain legal advice from a Solicitor.  It is important that you contact a Solicitor as quickly as possible.


Can my employer withdraw a Settlement Agreement?

Yes, their offer can be withdrawn at any point before you have both signed the Agreement.


When will I receive payment?

Once all parties have agreed the terms, and signed the Settlement Agreement, compensation is usually paid within 7-12 days.  However, certain payments will be made via the usual payroll system and dates, such as outstanding salary and accrued holidays, bonuses or commission payments due.


We have an experienced employment Team who can fully advise you on all the implications of signing the Settlement Agreement and will endeavour to ensure that you obtain a sum that represents the strength of your potential claim, together with a reference.

Call our specialist employment team on 01745 343661.




Posted in: Civil, Employment

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