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A settlement agreement is a legally binding contract which can bring an employment contract to an end on agreed terms. If you have been offered a settlement agreement or have a question you wish to ask in relation to one, contact our specialist settlement agreement team for advice on 01616 966 229 or complete our online enquiry form. Our solicitors will help you achieve the best possible settlement.
It is a legal requirement that you must receive specialist legal advice before signing a settlement agreement. We have offices in Bolton, London, Manchester, St Helens, Warrington and Wigan, our settlement agreement solicitors are able to provide advice at your convenience. Please contact us to arrange an appointment if you have been offered a settlement agreement.
Advising our client’s on settlement agreements is one of our specialist areas and something we do almost every week.
We regularly advise a range of clients from public and private sector workers to directors, shareholders and professional sports players. In certain circumstances we are instructed to not only advise on the terms themselves, but also negotiate higher settlement sums.
In certain circumstances a settlement agreement will be accompanied by a share purchase agreement which you may require separate advice on. Working alongside our commercial team we ensure specialist advice is offered at each stage in order to achieve a timely and efficient conclusion.
We appreciate there can be some urgency in signing off on a settlement agreement which is why we endeavour to arrange an appointment the same day if not the following day and will prioritise these appointments as best we can.
Yes - you do not necessarily have to wait to be offered a settlement agreement from your employer, you can make the first move.
We appreciate that disputes at work can arise and raising a grievance can sometimes seem easier said than done, particularly if a shareholder dispute arises. We are often instructed by our client’s to assist in negotiating their exit from employment in return for compensation; usually because they have a claim or a potential claim arising out of their employment.
A settlement agreement is often referred to as a ‘severance’ or ‘redundancy agreement’ and previously a ‘compromise agreement’.
In short, a settlement agreement is a legally binding contract that prohibits employees from suing their employer, usually after they have received a sum of money in return for agreeing not to bring certain claims against their employer.
Once a settlement agreement has been signed an employee will no longer be able to make an employment tribunal claim or any other type of claim that has been listed in this agreement.
For a settlement to be legally binding, an employee must receive independent legal advice. Here at Stephensons, our specialist settlement agreement team will be happy to provide you with the advice you need, and guide you through the process.
Requirements of a legally binding settlement agreement:
The employee must seek specialist independent legal advice before signing the settlement agreement. The employment solicitor should advise the employee on any potential claims so that the employee fully understands the legal issues and the value of any potential claims.
As employees have rights under UK law, anyone signing a settlement agreement should seek legal help before signing as a solicitor will make sure your rights are protected and that you are aware and fully appreciate these rights before you sign them away.
These rights fall under three main categories:
Contractual rights – These rights are set out in your contract of employment and will state your job title, your holiday entitlement, your right to be paid a salary, any other benefits as well as your notice period.
Common law rights – These rights are derived from the general law and regard how you are treated by your employer. These may involve aspects such as negligence, defamation and personal injury and any claims regarding these rights will have to go through the High Court or County Court.
Statutory rights – These rights derive from UK statute and any claims regarding these rights can only be pursued in an Employment Tribunal. These rights protect you from a wide variety of things including:
This is by no means an exhaustive list.
There are certain instances where rights may overlap and certain employee categories that have additional or different rights, so it’s vital you seek legal advice to make sure your rights are protected and that you fully understand which category you fall in to.
Without the appropriate legal advice, employees run the risk of signing away or waiving their rights by signing a document that they do not fully understand. With this in mind, the law encourages employees to seek expert legal advice to safeguard themselves from unscrupulous employers.
In order for employees to waive their statutory rights they must have agreed to either:
The advantage to the employer of getting a settlement agreement is that the employer can be sure the employee will accept the settlement and not seek further compensation. The advantage of a settlement agreement to the employee is that they receive a guaranteed amount of compensation in return for settling their claims.
Our settlement agreement solicitors can assist by:
Settlement agreements can be written in very formal language and can refer to sections of Acts and Regulations which you may never have heard of. Therefore, it is important that you understand the effect of the settlement agreement. It is a legal requirement that you get professional advice on what the agreement means. It is also a legal requirement that your adviser signs the settlement agreement to confirm that advice has been given.
According to the Employment Rights (Dispute Resolution) Act 1998, that advice can only be given by a qualified lawyer, a qualified trade union official or a qualified centre worker, all of whom must be covered by an appropriate certificate of indemnity insurance.
The cost of advice under a settlement agreement will in the majority of cases be covered by your employer, meaning that you may not have to pay anything for this advice personally.
If you have been offered a settlement agreement by your employer and would like to talk this through with our legal experts please complete our online enquiry form or call us on 01616 966 229 and we will be happy to discuss your options and guide you through the process. We have offices in Bolton, London, Manchester, Warrington and Wigan but can help clients nation wide with services available over the phone, via email and online meetings using Zoom or Teams.
A settlement agreement (previously known as compromise agreement) is a legally binding agreement between a business and an employee whereby the employee agrees to settle their claims (and/or waive their right to pursue claims), usually in exchange for financial payment.
If you have been offered a settlement agreement, it is important that you take independent legal advice regarding the legal consequences of signing the agreement from a compromise agreement solicitor. Employers will often contribute towards the legal costs of obtaining such advice.
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Employment Law Team of the Year at the Manchester Legal Awards
In the last 2 years
We have helped 2,000 clients with settlement agreements
In the last 2 years
we have given 50-75 hours on a pro bono basis as part of The Business Growth Hub
If you have received an employment settlement agreement from your employer, you should first seek legal advice and support from a solicitor. This is important, as once you have signed and agreed upon a settlement agreement, you waive your employee rights to take your employer to court or to an employment tribunal, preventing you from renegotiating the amount offered. It is best to seek legal advice, but many people worry about how much this might cost. No matter the settlement agreement amount, your employer will usually contribute towards your legal costs for seeking legal and independent advice. This financial support may be capped so you will need to find out the legal advice fee limit first.
At Stephensons, our highly experienced legal team are always on hand to offer free guidance and support in relation to employment settlement agreements. We can then discuss confidentially your individual case and circumstances and how much your employer has provided you with to seek legal advice.
For employers, it is important to note that from April 2018 settlement agreement tax has changed slightly. This concerns the taxable status on notice payments and we can offer guidance around this, as required.
For more legal advice and support in relation to settlement agreement fees please feel free to contact our team of highly experienced solicitors on 01616 966 229.
If you have been presented with a settlement agreement at work, there may be several terms used that you may be unfamiliar with. Visit our glossary which lists a number of common terms used in settlement agreements and their meaning - settlement agreement glossary.
Martha McKinley explains what a settlement agreement is, the importance of expert legal advice - whether an employee who has been offered a settlement agreement or from the perspective of an employer.
Martha also provides guidance on the sort of thing a settlement agreement will include along with information on the cost of legal advice and the timescales involved.
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What do I need to consider when offering an employee a settlement agreement?
Settlement agreements can bring an end to any claims from an employee such as, claims for unfair dismissal or discrimination arising out of the employee’s employment or termination. If executed properly settlement agreements...
Settlement agreements, which used to be known as compromise agreements, are legally binding documents which can be used by both the employee and employer to resolve a dispute or end employment. Settlement agreements are covered in the Employment Rights...
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