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Settlement agreements

A settlement agreement (previously known as a compromise agreement) is used to achieve a clean break between an employee and employer at the end of an employment relationship. It is a legally binding document whereby an employee agrees to settle/waive any claims he or she may have in return for an agreed sum and other benefits.

Settlement agreements cover claims such as:

  • Unfair dismissal
  • Discrimination
  • Redundancy
  • Unpaid wages

Some statutory claims however, such as personal injury claims and claims relating to pension are usually expressed to be outside the terms of settlement agreements.

There are various conditions that need to be met for the document to be valid:-

  • It must be in writing
  • It must relate to a specific complaint or complaints or particular proceedings
  • The employee must have received independent advice (usually from a solicitor)

By signing a settlement agreement an employee will then not be able to pursue an employment related claim against an employer hence why it is important to receive the right legal advice before signing.  If you feel you may have a potential claim against your employer, it is imperative to let your solicitor know all the details to know whether the financial offer and other terms are fair.

Our legal advisers can help negotiate a fair settlement with your employer, advise whether your employer has broken any employment law and if necessary identify your prospects of success in an employment tribunal or at court.

Whilst there is no minimum time period in law to consider a settlement agreement, the ACAS Code of Practice recommends 10 calendar days for an employee to consider the proposed terms and to receive independent legal advice.

When your employment is ending, it can be very stressful.  People often feel uncertain or confused about whether they should sign a settlement agreement. 

We can help guide you through the process and advise you of your options.  For more information please contact Tim Ollerenshaw or Parveen Sidhu on 01926 674544.

Team members

Parveen Sidhu
Solicitor
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Tim Ollerenshaw
Solicitor - Director
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