Settlement Agreements

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Being given a settlement agreement (formerly known as a compromise agreement) can be stressful and emotive, and if you don’t get independent legal advice, the agreement won’t be binding.

What’s more, if you believe you have a claim against your employer, you should not sign the agreement and should seek legal advice immediately.

Our employment solicitors have significant experience of guiding people through the settlement agreement process, negotiating the most favourable terms for clients and ensuring your interests are protected.

Settlement agreements are increasingly being used where an employee has applied for voluntary redundancy. Some employers call this a voluntary severance scheme or a mutually agreed redundancy scheme, commonly known as MARS. Generally employers using these schemes will require you to get independent legal advice prior to signing the agreement.

Very often employers pay, or contribute to, the legal fees associated with a settlement agreement, so it is possible there will be no cost to you.

The Benefits

  • Qualified Lawyers

    Qualified solicitors

    Your case will be dealt with by a qualified employment solicitor who has significant experience of negotiating settlement agreements.

  • Real World Advice

    Independent, jargon-free advice

    We’ll explain everything to you clearly, making sure you know the implications of the agreement and are 100% happy with it before you make the decision to sign.

  • Practical Solutions

    Swift service

    For many people this is a stressful time, so we make sure we deal with your settlement agreement swiftly and efficiently, so that you can resolve the matter and move on with your career.

Settlement agreement being signed

Frequently asked questions

What is the process for sorting out a settlement agreement?

We will review the terms and explain them to you, discussing how the agreement came about. If you are happy to proceed, you will sign the agreement. We will also sign the document and send it to your employer. You will receive a completed copy either from the company or from us. If your leaving date is in the future, you go to work as normal until then, otherwise you are no longer an employee and (subject to the terms) are free to get a new role, retire, take a work break or even a holiday.

Do I have to pay upfront for a settlement agreement?

If your employer is paying the cost of your legal fees, we will invoice them directly.

Why do I need legal advice?

A settlement agreement is a legal document. Without legal advice the agreement is not binding. When you sign a settlement agreement you are effectively agreeing to forego your employment rights and not bring any claims against your employer.

Will my lump sum be tax free?

The first £30,000 is usually tax free but notice pay is taxable.

Is a settlement agreement confidential?

Most settlement agreements state that you mustn’t discuss the terms of the agreement with anyone or must keep secret that the agreement exists.

Can I still make a claim against my employer after signing a settlement agreement?

Once the agreement is signed, you cannot file a claim against your employer save for three limited possible claims, namely any issues with your pension, personal injury claims that you are not aware of at the time of signing and enforcing the settlement itself. This is subject to the exact wording of your agreement.

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