Settlement Agreements

Settlement Agreement Solicitors

Settlement Agreements are often offered by an employer to an employee, without any prior warning.  If you are the employee in question, this can leave you wondering about what this means for you and what to do next.

What is a Settlement Agreement?


A Settlement Agreement is an agreement which can be used to waive employment claims which you may have against your employer. Usually, this will involve the termination of your employment and a sum of money paid to you to settle (give up) your employment claims.

In addition to written terms about the settlement of claims and monies payable to you, the agreement may also include other terms e.g. about the confidentiality of the agreement and not making derogatory comments about each other.

Usually, an agreed reference will be included within the terms of the agreement which your employer will agree to provide if a reference request is made. This can give you peace of mind that your employer has contractually agreed to provide a reference and its contents are also contractually agreed.

Legal advice 

You will be required to take independent legal advice about the terms of the Settlement Agreement and it is usual for your employer to pay a contribution towards your legal costs for taking this advice.

If you are offered a Settlement Agreement, our expert employment solicitors will check whether you are being offered a good deal, taking into account your contractual entitlements and your potential claims. We can help you achieve an improved financial package in certain circumstances.

Sometimes your employer will require you to continue working whilst you arrange to seek legal advice but sometimes your employer will ask you to take paid leave.

At BTTJ, our employment solicitors have years of experience in providing bespoke advice and guiding people through the process to make sure that the agreement is fair. Please get in touch with us if you would like to discuss your situation with our employment solicitors.

Can I ask for a Settlement Agreement?


Either you or your employer can start a discussion about the possibility of entering into a Settlement Agreement. Any discussion or correspondence about ending your employment on agreed terms should ideally be stated as being a “Confidential Discussion under Section 111A Employment Rights Act 1996”.

If you think that “the writing is on the wall” in terms of your continued employment and consider that you have potential employment claims, you may wish to consider broaching the subject of a Settlement Agreement with your employer. This can result in a more satisfactory result than pursuing your claims in an Employment Tribunal as concluding a Settlement Agreement will give you a quicker and certain outcome.

Our employment law solicitors are experienced in making these approaches to your employer, negotiating a financial package for you and advising upon the terms of a Settlement Agreement.

When might I want to ask for a Settlement Agreement?

You may want to start a discussion about an agreed exit under a Settlement Agreement because, for example, your employer is calling you to a disciplinary meeting, alleging that you have committed gross misconduct. You may feel that it would be better to try to agree an exit with your employer, rather than having to explain a possible gross misconduct dismissal, without notice, to a future employer.

Alternatively, you may want to start the discussion because you feel that the working relationship is no longer tenable e.g. if you consider that you are being bullied or seriously undermined at work. In this situation, you could raise a grievance to try to resolve matters internally but if you have reached the stage whereby you feel that the relationship is so bad that you want to leave, then broaching a Settlement Agreement could be the preferable option.

What are the advantages of a Settlement Agreement?

Signing a Settlement Agreement is often the most satisfactory outcome for both parties as it avoids the need to be involved in Employment Tribunal proceedings which can be time consuming, costly, stressful and unpredictable. Settlement Agreements allow both sides to put matters behind them, with the least amount of angst.

Get In Touch With Our Employment Law Solicitors

If you are offered a Settlement Agreement or you would like to initiate discussions about an exit from your employment linked to a Settlement Agreement, please get in touch


Offices in Coventry, Warwick, Southam and Balsall Common

We have offices in Coventry, Warwick, Southam and Balsall Common and our solicitors work across the whole of the Coventry and Warwickshire region including Stratford upon Avon, Rugby, Nuneaton, Leamington Spa, Kenilworth and Atherstone as well as further afield.

The above is not intended to provide advice.