Settlement Agreements

Settlement agreements (formerly known as compromise agreements) are legally binding contracts made between an employer and employee usually when an employment relationship comes to an end due to redundancy - or simply one or both parties wanting to bring the employee’s employment to an end in an amicable way. In exchange for a compensation payment from the employer, the settlement agreement ensures that the employee will not pursue any potential claims to the employment tribunals.

Settlement agreements are not legally binding unless the employee has taken independent legal advice on its terms and effect and the solicitor has signed an advisor’s certificate which is usually annexed to the back of the settlement agreement. The employer makes a contribution to the employee’s legal fees, typically between £350 and £500 VAT.  If it turns out that the employer’s contribution will not cover the fees entirely then it is quite reasonable to ask the employer to increase their contribution and often they will do so.

It's important that legal advice is obtained in good time to negotiate any amendments before the deadline for its signature and return, or if a settlement agreement has not been offered by the employer, to raise the issue with the employer in a way that makes it an attractive option for them to pursue.

The settlement agreements I deal with on a regular basis  range from those with relatively straightforward terms where both parties are happy with the wording and 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 compensation sum is increased substantially.   

Whatever your circumstances, I will take the time to understand your situation so I can negotiate the best terms on your behalf.  It is particularly important to check that the tax treatment of any monies payable to you are correct and where possible according to Inland Revenue rules, the wording is amended to your advantage.

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.