Settlement Agreements



What is a Settlement Agreement?

A Settlement Agreement is a written contract between you and your employer. They are usually used to define the terms upon which your employment will come to an end, or the terms of a settlement reached where your employment may already have ended.

A Settlement Agreement usually includes some form of “severance” or “termination payment” which is to be paid by your employer in return for which you agree not to pursue any claims that you may have arising out of your employment or its termination in an Employment Tribunal for example.  Sometimes this is offered because there are potential claims which exist. Sometimes an Employer is just offering an enhanced severance package in a redundancy situation and requires an agreement to be signed in return for peace of mind.

It is one of the few lawful ways that a binding settlement can be achieved when an employment relationship comes to an end, and it is a favored method of Employers because it brings certainty and closure.

Why do I need to obtain legal advice?

A Settlement Agreement will not be lawful and binding unless you receive legal advice from a “relevant independent adviser” before signing it. We are qualified to provide this advice.

The Ellisons Employment Team will go through the Agreement with you to ensure you understand it and the implications of signing it. We will also advise you on the merits of any claims you may have and on the amounts being offered.  Should you choose, and where appropriate, we can negotiate on your behalf for an increased settlement payment and/or for amendments to the terms.

How do I get further help?


If you would like to instruct us to deal with your Settlement Agreement, or if you have any questions or wish to discuss how we can help you with your Settlement Agreement please contact us on a no obligation basis by completing the form here or by calling us on 01473 556903 or 01206 764477.


How much will it cost?


If you enter into the Settlement Agreement it is customary for your employer to offer to contribute towards your legal fees. Typically the contribution is between £250 and £500 plus VAT. If the agreement is straight forward, and you are happy to sign up without any need for further negotiation, the contribution offered will usually be enough to cover your fees. If this is likely to be the case we will let you know at the outset.

With more complex agreements, or where negotiation is requested or where the severance is for very senior employees or directors, the fees will often exceed the contribution offered. If this is likely to be the case, we will discuss the fees with you and agree a course of action with you. Where appropriate we will seek an increased contribution from your employer. If the employer’s contribution is unlikely to be sufficient to meet the total fees, we will discuss this with you and agree terms with you.


Get in touch

If you have any enquiries please contact any one of our specialist team who would be pleased to advise you on your options by completing the contact form.

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