Settlement Agreements

Employment Law Solicitors

If your employment is being ended with a Settlement Agreement, we can help you achieve the best possible outcome. Our specialist Employment Law Solicitors are highly experienced in dealing with Settlement Agreements across a wide variety of sectors. We offer straightforward advice, meetings at short-notice and will routinely conclude Agreements with a quick turnaround. Usually your employer will contribute towards some or all of the legal costs.

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Settlement Agreements are agreements between an employee and employer that effectively signs away the employee’s rights to any claims that they may have against the employer.

Under the terms of the Settlement Agreement, the employee generally accepts a compensation sum from the employer in exchange for them agreeing to give up their rights in terminating their employment.

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Settlement Agreements are a good way of settling most disputes when an employee’s employment is to be terminated.
They provide the employee with a compensatory payment, in exchange for providing the employer with the assurance that the employee will not bring a claim against it at Court or Tribunal.
Settlement Agreements are are also offered by the employer to ensure confidentiality surrounding the employee’s dismissal, early retirement or as part an enhanced redundancy scheme.

Our Employment Law Solicitors specialise in reviewing, preparing and advising on Settlement Agreements. Please click ‘Contact Us’ below to get in touch and arrange a consultation with one of our experts.

Frequently Asked Questions about Settlement Agreements

Why do employers enter into Settlement Agreements?

Settlement Agreements may be offered in circumstances where there is an employment dispute between the parties. By entering into a Settlement Agreement, it provides the employee with a compensatory payment, in exchange for providing the employer with the assurance that the employee will not bring a claim against it at Court or Tribunal.

What compensation should be offered/accepted as part of the Agreement?

There is no ‘one size fits all’ answer and this generally depends upon the strength of the your claims against the employer, and the likely sums an Employment Tribunal may reward. In addition, you may also wish to consider how long it may take you to find suitable alternative employment and the losses you will incur in the meantime.

The first £30,000.00 of compensation for the loss of employment can be paid free from tax and national insurance deductions. Please note that contractual payments are not ‘compensation’ and should remain taxable. There should generally be a financial incentive for the employee to enter into the Agreement, over and above their basic contractual and statutory entitlements.

How is the Settlement Agreement concluded?

In order for a Settlement Agreement to be validly executed, the employee must seek independent legal advice. It is usual for the employer to pay most, if not all, of the fees incurred by the employee seeking legal advice on the terms and effect of the Agreement. The parties may have already agreed the final form of the Settlement Agreement before the employee seeks legal advice, or a draft of the Settlement Agreement is prepared pending negotiations.

What other non-financial benefits are there for entering into a Settlement Agreement?

It is usual for the Settlement Agreement to include confidentiality clauses preventing the parties from discussing the contents of the Agreement and the circumstances leading up to it. The parties can also agree not to say unpleasant things about one another, something which can be beneficial where there has been acrimony between the parties. Further, the employer could offer a reference to the employee as part of the Settlement Agreement, something which could not otherwise be awarded by an Employment Tribunal.

In some cases the employer may choose to include restrictions, to ensure that the employee does not compete with the employer or do business with its clients for a certain period of time following the termination of employment. Settlement Agreements can be used to reaffirm or remove existing restrictions already contained in the employment contract.

Contact the Franklins team

For further advice and assistance, contact the Franklins team on 01908 660966 / 01604 828282 or email info@franklins-sols.co.uk.

Please note that we are endeavouring to keep our news and guidance up-to-date. However, as you will appreciate the landscape is rapidly and constantly changing and therefore, whilst the information provided was accurate at the time of posting the position may have since changed. We do however update our website regularly and we will effect any necessary changes and updates as soon as possible.

If you have any questions, please don’t hesitate to contact our team of experts who are on hand and ready to help you.