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, the Settlement Agreement may also include other terms eg about the confidentiality of the Agreement and not making derogatory comments about each other.

Usually, a reference will be included within the terms of the Settlement Agreement which your employer will agree to provide if a reference request is made.


What legal advice do I need?

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, we 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.


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.

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.

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


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.


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 contact our Employment Solicitor, Julia Woodhouse on 024 7653 1532 or email Julia.Woodhouse@bttj.com.

Our solicitors work across the whole of the Coventry and Warwickshire region including Rugby, Nuneaton, Bedworth, Leamington Spa, Kenilworth, Warwick, Atherstone and Balsall Common as well as further afield.


The above is not intended to provide advice.