Settlement Agreements

Settlement agreements, formerly known as compromise agreements, are legally binding contracts made between an employer and employee when the employment relationship comes to an end. This can be for a wide variety of reasons, including but not limited to redundancy.

In exchange for a termination payment, the settlement agreement ensures that the employee will not pursue any potential claims against their employer to an employment tribunal.

Settlement agreements are not legally binding unless the employee has taken independent legal advice and the employee’s solicitor has signed an advisor’s certificate. The employer makes a contribution to the employee’s legal fees, typically between £350 and £500 plus VAT.  If it turns out that the employer’s contribution will not cover the employee’s fees entirely then it is quite reasonable to ask the employer to increase their contribution.

Settlement agreements dealt with on a regular basis range from those with relatively straightforward terms, where the agreement can be signed off promptly with little or no amendments, to much more complicated scenarios where many of the terms need to be revised and the termination payment is increased substantially.   

I will take the time to understand your situation and negotiate favourable terms on your behalf.  It is particularly important to check that the tax treatment of any payments are correct.

At Duxburys Solicitors, in Tunbridge Wells, I deal with all types of employment law cases and I have experience in negotiating and advising on settlement agreements for employers and employees.

To discuss your situation, please call me today on 01892 538762 or 07900 695142.