Contact Us

A settlement agreement is a contract between employer and employee (or ex-employee) governing the arrangement reached between them when the employee has an employment claim. Employers may make an offer of settlement where:

  • there is a dispute at work,
  • there has been a termination of the employment contract due to redundancy or reorganisation, or
  • the employee is already progressing a claim in the employment tribunal.

The employer will usually offer a compensation payment (also referred to as severance payment or termination payment) in return for the employee’s undertaking to not to pursue their claim in the employment tribunal. The settlement agreement may or may not deal with a payment in lieu of notice of termination.

Employers need to make sure their employee takes advice about the settlement agreement from a relevant independent adviser (a solicitor for instance) – they usually make a contribution towards legal costs.

Both parties may find a negotiated settlement useful. If the correct formalities are fulfilled, the employee will be precluded from pursuing employment claims. In this way the employer knows that it is protected from future action, and any adverse publicity that may create.

The employee will receive a financial sum without recourse to the courts and they are then released from work and are able to move on with their lives.

More information about settlement agreements is available on our dedicated Settlement Agreements site. Or Call us on 020 3878 8700 for a Free Chat to discuss (i) settlement agreement drafting, if you are a business or (ii) the terms of a settlement agreement your employer has given to you, if you are an employee.

Settlement agreements

For comprehensive information on settlement proposals, severance payments and taxation, visit our settlement agreements website

Visit our settlement agreement website

“Just to thank you for all your help and services in these crucial moments”

“Thank you for everything and for going the extra mile this week.  It is painful but you made it a bit less so!”

“Your professional disposition and prompt correspondence throughout the process was exceptional”

“Thank you for everything: your professionalism, responsiveness and wise counsel. You were simply brilliant!”

“You made me realise I had potential and shouldn’t waste it”

“I wanted to thank you for all your kind and efficient help in sorting out my grievance matter –successfully concluded!”

” Thank you so much for all your help with my settlement and for the support over the past couple of weeks – I couldn’t have done it without you “

“If anybody needs your service, I will recommend straightaway – thank you for your prompt service.”

    Request a callback