Settlement Agreements

Our specialist employment law solicitors have each handled a vast number of settlement agreements (formerly known as compromise agreements), from the most simple to the very complex and valuable. 

Why Wilkin Chapman?

Our specialist employment law solicitors have each handled a vast number of settlement agreements (formerly known as compromise agreements), from the most simple to the very complex and valuable.

We understand that employment law can be complex, and that dealing with the termination of your employment or any employment dispute can be a daunting experience.

We are straight talking and practical, and will use our experience and expertise to provide you with clear advice which is tailored to your needs, and will give you the tools you need to help you navigate through potentially difficult waters.

To give you a head start, we’ve set out some more information on settlement agreements below. If you need any further information, please give us a call.

What is a settlement agreement?

A settlement agreement is a legally binding agreement usually between an employer and an employee which either settles an existing claim by an employee or waives an employee’s right to bring potential claims against the employer in an employment tribunal/civil court.

When are they used?

There are a couple of circumstances where settlement agreements are used:

Pre-termination negotiations

Settlement agreements are usually used on termination of an employee’s employment following what is referred to in employment legislation as a “pre-termination negotiation” – which is sometimes referred to as “a protected conversation”.

A pre-termination negotiation allows an employer to discuss a proposal to end the employment relationship on negotiated terms. If conducted properly (we can discuss this with you in more detail), this conversation will not be able to be referred to in a future employment claim.

The terms reached following the negotiation will be documented in a settlement agreement.

Disputes

If there is an existing dispute between the parties, a settlement agreement can be used as a way of resolving that dispute. Usually, the employee will agree to waive potential claims as well as the existing claim. Again, the terms of the agreed resolution will be set out in the settlement agreement.

Why do I need to take legal advice?

Basically, to make sure the agreement works.

In order for the waiver of statutory employment rights to be valid, certain conditions must be met. This includes a condition that states that the employee must have received independent legal advice from a relevant adviser (either a qualified lawyer or certified trade union official/advice centre worker) on the terms and effect of the settlement agreement and its effect on the employee’s ability to pursue any rights before an employment tribunal.

What will the legal advice involve?

We will ask you/the employer to send us a copy of the settlement agreement. We will also ask to see a copy of your employment contract and any relevant correspondence between you and your employer.

We will talk to you about the circumstances surrounding the settlement agreement.  Following this, we’ll review the settlement agreement, and advise you on any suggested amendments to the legal terms of the agreement. Depending on the scope of your instructions, we may also advise/negotiate on your behalf in respect of the commercial terms of the agreement.

Once we are both happy with the terms of the agreement, we will take you through the agreement and explain the effect of the clauses. If you’re still happy, you can sign the agreement.

We will usually be asked by the employer to sign a certificate which will confirm that we have given you the relevant advice to validly waive your claims.

How long does it take?

This depends on the circumstances. However, we will work hard to meet any deadlines that have been set by the employer.

Who meets the costs?

This is usually part of the commercial terms of the deal. Typically, the employer will meet the costs of advising on the terms and effect of the agreement. If you ask us to negotiate any of the commercial terms of the deal, then the employer may push back on being asked to pay for the time spent on that part of the negotiation, and so you may have to contribute towards the costs.

What do I need to do now?

If you need any further information or would like to arrange an appointment to speak to one of our experts, please contact us.

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Partner and Head of Employment and Regulatory & Crime

Employment Law

Our specialist employment department is the leading employment law team in the region. If your employment has been terminated and you believe it has been done unfairly, then do contact our employment law specialist solicitors to find out whether we can help you.

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